Soaring Housing Costs Hamper Palm Beach, Broward

Housing costs in Palm Beach County and Broward County made up a much larger portion of people’s paychecks last year than they did in 2000.

That’s according to the South Florida Sun-Sentinel, citing a U.S. census data released earlier this week.

It’s yet another sign of how South Florida residents have stretched their finances as housing prices continued to skyrocket.

Analysts fear the amount of income that owners spend on Florida mortgages will increase as ARMs convert to higher rates.

The gap between salaries and affordable homes could hurt the region’s desirability, despite the recent drop in home prices.

“This place has really become unaffordable,” David Levin, a Delray Beach housing consultant, said. “You can’t sustain a lifestyle when you spend a disproportionate amount of money on housing.”

• Last year, 42 percent of homeowners with Florida mortgages in Palm Beach County spent at least 35 percent of their gross incomes on housing costs. That’s up from 24 percent of homeowners in 2000.
• In Broward County, 43 percent of homeowners spent that much of their incomes on housing costs, up from 26 percent in 2000.

Credit counselors once advised consumers not to spend more than 28 percent of their incomes on housing and no more than 36 percent on all debts.

That theory has eroded, though, as so many people are just stretching and stretching and stretching beyond belief to pay the Florida mortgage.

Grace Short and her husband, James, are wilting under the weight of $3,500 monthly mortgage payments on their Boca Raton house that they decided to refinance four years ago.

The payments are scheduled to increase in November.

“We just can’t do it,” said Short, 57, a hairdresser. “Something has to be out there to help people.”

The census defines homeowner housing costs as one’s home mortgage principal, interest, taxes and insurance, plus utilities, Florida home equity loan payments and condo and/or homeowners association fees.

Continue reading this article the South Florida Sun-Sentinel on the South Florida real estate market and the soaring cost of housing …