Report: Majority of renters can’t afford to buy in their city


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Porch’s study compared the average home price in each metro area and the median income for renter households in that area, then calculated how many renters would spend 30 percent or less of their income on a mortgage payment for the average home in their area. Most financial experts recommend keeping housing costs to 30 percent or less of household income for affordability.

Porch’s researchers found that:

· The average home in the U.S. costs seven times the average national household income.

· Homeownership is unaffordable for the majority of renters in 71 percent of metro areas.

· In 13 metro areas, 10 of which are in California, at least 90 percent of renters are priced out of owning a home. The three metro areas outside of California are in Cape Cod, Hawaii and Boulder, Colo.

In the D.C. metro area, 70 percent of renters can’t afford to buy a home, according to Porch’s analysis. Their calculations found that the average home is priced at $526,296 and that 30 percent of households rent in metro areas. Those renter households have a median income of $56,400, while the median income needed to buy the average house in the area is $64,055.

Numerous housing programs are in place to help renters become homeowners, including down payment assistance programs, and loan programs through the Federal Housing Administration (FHA), Veterans Affairs (VA) and the Department of Agriculture (USDA).

To help first-time buyers compete against investors, the Department of Housing and Urban Development recently extended the period during which owner-occupant buyers can bid on foreclosures now owned by HUD. As of March 1, businesses and investors will have to wait 30 days before they can bid on some properties owned by HUD.

Previously buyers only had 15 days before investors were allowed to bid on the properties. These one- to four-unit homes must be eligible for FHA 203(b) financing, which can be used to wrap repair costs into a 30-year fixed-rate loan.

The Washington Post: Breaking News, World, US, DC News and Analysis


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