Home Affordability: Myth or Reality?

For many young couples, the idea of owning their own house
just like their parents is an attractive idea, but it’s not
very realistic. A recent poll conducted by the Associated
Press and America On Line Real Estate showed that 80 percent
of respondents believe that it is hard for first-time buyers to
afford a home. A majority of those polled – 59 percent – also
said that they believe it is harder to buy a home now than it
was five years ago.

Taking a closer look at the poll reveals that young adults and
those that classify themselves as minorities consider the
affordability of homes a bigger problem now than five years ago,
compared to those over the age of 50 and those that identify
themselves as white.

Broken down by region, almost 70 percent of those living in
the western United States and almost 65 percent of those
living in the Northeastern US say that it’s harder to buy now
than five years ago, compared to only 54 percent of those
living in the South and 51 percent of those living in the
Midwest.

The poll also found that almost half of those surveyed thought
that the real estate market in their home area was overpriced.

A recent report by the census bureau seems to back up the
findings of the AP/AOL survey. The census report found that
approximately one third of all homeowners in the US that have
mortgages spent at least 30 percent of their income on housing
and housing related costs. It’s widely considered excessiv
e if your housing costs make up more than one third of your
income. The census took things like mortgage payments,
insurance and utilities and taxes into account.

The biggest reason for this lack of faith in new home ownership
can be directly attributed to the recent housing boom over the
last five years. Also, a recent increase in mortgage rates
has also dampened optimism. And while incomes are up, as well,
most don’t even keep up with inflation.

Another recent trend that has kept optimism for first time
home buyers down is the 32 percent jump in median home value
from 2000 to the end of 2005. The current median price is
around $167,500. While buying your first home is never easy,
things may be a bit harder now than they have ever been. But
bargains so still exist, and if you’re patient, a first home
can still be yours.

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About the author

Dencho Denchev is not a real estate broker. He is human like you. He's goal is help others buy real estate with no money, no job, no credit, even bad credit. For more info visit Dencho's site: http://tinyurl.com/yc8obne

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