Friday, April 22, 2011

A Nation of Homeowners?

Last night, outside under the stars, I was the beneficiary of the company of fascinating conversationalists. Our conversation was wide ranging, but one topic we discussed was affordable housing. While there is great discussion about the benefits and costs of home ownership, home ownership is out of the question for those with low salaries. Nationwide, one needs a $61,732 salary to be able to buy a house. Looking at the national median household income, 50% of US households make below $50,221 and 50% of US households make above this amount. In general (disregarding regional house price differences, generational differences, etc.), home ownership is not possible for 50% of US households.

Based on a completely unverifiable online calculator, I found out that to buy a house at the Ward 6 median sale price ($535,000, 50% of the houses sold at prices below this, 50% sold at prices above this) one would have to have a $168,000 salary. The data on jobs is from another online service, so who know how accurate it is, but you get a general view of salaries. (I don't know why NeighborhoodInfo reports average household income and not median.) No matter the calculation, home ownership is out of the question for those with such full-time jobs as receptionist, home health aide, and so on, as well as for the unemployed (DC's 10% unemployment rate, Ward 6's 9.4%, and Ward 7's 20.7%).

Median Household Income (2009)
Annual Income Needed to Buy House (2008)
Hourly Wage Needed for 2-Bed. Rental
$ 17.85
Home Ownership Rate (2009)

Ward 6
Avg Household Income (2005-9)
Median House Sale Price (2010)
Estimated Income Required for Median House
Home Ownership Rate (2009)

Full-Time Salaries of Selected DC Jobs
Hair Dresser
Line Cook
Security Guard (unarmed) $27,000
Cashier $28,000
Home Health Aide
School Bus Driver
Auto Mechanic
Administrative Asst.
Police Officer
University Professor
DC Council Member (part-time)
Chief Executive (national)
Surgeon (national)
Transocean Pres. (2010)
$1.1 million

OK, so the Transocean president is not a DC resident, but it is just there for comparison. If people wish that we were a nation of homeowners, what might we do to realize this? Or is home ownership the wrong goal?

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