More Americans Find Themselves 'House Poor'

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WASHINGTON (Oct. 3) - Americans are becoming increasingly house
poor.
Homeowners in every state but one spent more of their incomes on
housing costs last year than at the start of the decade, according
to data released Tuesday by the Census Bureau. Those in Alaska
spent the same.
Nationwide, homeowners spent nearly 21 percent of their incomes
on housing costs last

WASHINGTON (Oct. 3) - Americans are becoming increasingly house

poor.

Homeowners in every state but one spent more of their incomes on

housing costs last year than at the start of the decade, according

to data released Tuesday by the Census Bureau. Those in Alaska

spent the same.

Nationwide, homeowners spent nearly 21 percent of their incomes

on housing costs last year, up from just under 19 percent in 1999.

Housing analysts blamed surging home prices, higher interest

rates and lower incomes for hurting affordability.

"It is now much more difficult for first-time homebuyers to get

into the market, and for existing homeowners to trade up," said

Mark Zandi, chief economist at Moody's Economy.com. "This decline

in affordability is the catalyst for the current sharp decline in

housing activity."

The housing market has gone soft in many areas, but home prices

are still much higher than they were at the start of the decade.

Nationwide, median home values jumped 32 percent from 2000 to 2005,

to $167,500.

Household incomes have not kept up, dropping 2.8 percent during

the same period.

"Until incomes catch up, the housing market is going to remain

flat," Zandi said.

America's home ownership rate is at a near-record 68.7 percent.

But some housing advocates warn that declining affordability will

make it difficult for low-income owners to keep their homes.

For example, the government says housing costs are excessive if

they top 30 percent of household income. Nationally, 34.5 percent

of homeowners with a mortgage had housing costs that topped that

benchmark in 2005, an increase from 26.7 percent in 1999.

The percentage of homeowners exceeding the benchmark increased

in every state but one during the period. In Hawaii, it stayed the

same at 39.7 percent.

Housing costs are defined as mortgage payments, taxes, insurance

and utilities.

"Families want to become homeowners and they are willing to

spend more to get there," said Jeffrey Lubell, executive director

for the Center for Housing Policy, which advocates for affordable

housing.

"But as they spend more and more, they are taking on mortgages

that could put their homeownership at risk," Lubell said.

The Census Bureau released 2005 housing data from the American

Community Survey, which is replacing the "long form" on the

10-year census. Starting this year, the annual survey of about 3

million households provides yearly data on communities of 65,000 or

larger. By 2010, it will provide annual multiyear averages for the

smallest neighborhoods covered by the 10-year census.

The Census Bureau previously released data in incomes, poverty,

race and ethnicity.

California stands out among the states with expensive housing

costs. It ranked No. 1 in median home value, at $477,700; No. 2 in

monthly housing costs for homeowners, at $1,912; and No. 2 in

monthly costs for renters, at $973.

Nearly half of California homeowners - 48 percent - spent more

than 30 percent of their incomes on housing last year.

"We really are reaching the outer edge of the envelope of what

people can manage," said Cynthia Kroll, senior regional economist

at the University of California at Berkeley.

Among the other findings released Tuesday:

New Jersey had the highest monthly housing costs for

homeowners, at $1,938.

West Virginia had the least expensive monthly costs for

homeowners, at $797.

Hawaii had the highest monthly costs for renters, at $995.

North Dakota had the lowest monthly costs for renters, at $479.

Mississippi had the least expensive median home value, at

$82,700.

Among America's 15 largest cities, San Francisco had the most

expensive homes, with a median value of $726,700. Detroit had the

least expensive, at $88,300.

San Diego had the biggest increase in median home values from

2000 to 2005, going from $249,000 to $567,000.

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