Why it’s difficult to own a home for some people.
Can housing affordability still be a possible solution to the growing demands of home ownership of the less privileged? That seems to be a dream among those whose incomes don’t qualify them for a home purchase. According to the Center for Housing Policy’s “Paycheck to Paycheck: Wages and the Cost of Housing in America” last year’s workers had a harder time making ends meet to afford a house. The report states, “While more workers can afford typical housing costs in their community in 2009 compared with 2008, a substantial gap remains between many workers’ salaries and the income needed for housing. Despite lower interest rates, relatively low home prices, and moderate rent increases, many workers are still unable to affordably buy a median-priced home or rent a typical apartment in the communities they serve. The somewhat higher-paid workers in the green economy – people who make the nation’s homes and businesses more energy efficient and who help to produce clean and sustainable energy – are better able to afford housing than other working families but still struggle with housing affordability in many markets.”
All the while we thought that we’re in a buyer’s market considering the bargain prices in key areas are creating frenzy among hunters. But the report presents the fact that not everyone is keen to shop around mainly because their incomes spoil their dreams of homeownership. It further states that “For many U.S. workers the median-priced home is unaffordable even at today’s relatively low prices. Even many workers in the growing green economy cannot afford to purchase a home of their own. For workers in more expensive areas, renting a typical two-bedroom apartment is also unaffordable.”
And many would highly suspect that aside from income, there are many factors that can limit one’s chances of owning a home. For example, a first time buyer may have found a home that suits his taste but if a competing big time investor can match his deal with a down payment higher than 20 percent, there’s no way that a very eager seller would refuse the investor’s tempting offer.
Second, low credit scores still discourage many interested buyers from pursuing what they want because most banks have already raised their qualifying scores for borrowers. Underwriting requirements are generally stringent these days and improving one’s credit score remains a tough challenge.
Third, the first quarter’s dismal employment figures sent laid off workers into more woeful conditions. Although we’ve had slight improvements since April, the job market still has to provide a ray of hope for more than 9.9 percent who are out of work.
Finally, the government can only do s home tax credit program may have been successful but it was costly according to the New York Times . In a report, it says, “many tax policy experts say it has been singularly cost-ineffective: most of the $12.6 billion in credits through end of February was collected by people who would have bought homes anyway or who in some cases were not even eligible… real estate agents say there are at least three others who collected the credit even though they would have bought without it. That means for each new buyer who was truly lured into the market by the credit, the federal government paid more than $30,000.” And you thought that it was good enough to spur significant economic activity!