Housing Costs out of Reach for Many American, Florida Borrowers

Home prices across the national and Florida housing market may have dipped over the past year, but many American workers would still struggle to afford a median-priced home in major cities, a new study said last week.

“American workers are really not gaining ground and they’re so far behind in the first place,” said Barbara Lipman, research director for the nonprofit Center for Housing Policy, which conducted the study.

While the median home price in the 202 largest metropolitan areas declined 2 percent from a year ago to $248,000 in the third quarter of 2006, Florida mortgage rates rose enough over the year that homes actually became less affordable as pay did not keep pace.

“The real story is what happened to salaries,” Lipman said. “Lower-paid occupations - such as in retail, or home health workers - their salaries went up only about 3 percent.”

The study found an annual income of nearly $85,000 was needed to afford the median-priced U.S. home. This has caused many locals to flee due to rising housing costs.

The study assumed home buyers needed a 10 percent down payment and could afford to pay 28 percent of their income on Florida mortgage payments, property taxes and home insurance.

In reality, many households expend a much higher percentage of their incomes on mortgage payments, Lipman said. To afford that, consumers cut other expenses such as for health care and transportation, she said, citing research showing unaffordable housing is the major reason families lack health insurance.