Contact: Michele Anapol (202) 466-2121 x226 manapol@nhc.org

Washington, DC (May 7, 2009) – Despite declining home prices, many of the jobs created through the federal stimulus package do not pay enough to afford a home, according to Paycheck to Paycheck: Wages and the Cost of Housing in America. This new study compares housing costs in more than 200 U.S. metropolitan areas with the wages earned by workers in 60 occupations and was released today by the Center for Housing Policy, the research affiliate of the National Housing Conference. In particular, the study takes an in-depth look at housing affordability for five construction-related occupations that may see a boost from the stimulus package, including construction managers, carpenters, equipment operators, long haul truck drivers and construction laborers. For all of these occupations except construction managers, homeownership remains unaffordable, even after the recent drop in home prices. Construction laborers also struggle to pay rents in three out of four markets studied, while equipment operators and long-haul truck drivers are unable to afford rents in approximately one-fourth of the markets.

In addition, Paycheck to Paycheck found that in Florida, one of the states hit hardest by the foreclosure crisis, the rental market has become substantially less affordable. In the study’s nationwide ranking of metro areas from highest to lowest rents, each of the Florida rental markets studied climbed significantly up the list between 2007 and 2008.

“Contrary to popular belief, the recent decline in home prices has not resolved the nation’s housing affordability problems,” said Jeffrey Lubell, executive director of the Center for Housing Policy. “Working families – including most of the workers who will be hired as a result of federal spending in the stimulus package – still cannot afford to buy a home in most markets, and many also struggle to afford their rents.”

“This study confirms the importance of using the recent decline in home prices as an opportunity to put long-term solutions into place,” added Center for Housing Policy Chairman John McIlwain, senior resident fellow at the Urban Land Institute (ULI), ULI/J. Ronald Terwilliger Chair for Housing. “By acquiring well-located properties made vacant through foreclosure and by instituting policies that can ensure that a modest share of future development is affordable, communities can bring housing within reach of working families.”

A Closer Look –
Paycheck to Paycheck and Occupations Connected to the Federal Stimulus Package
The findings for construction-industry occupations and homeownership reveal that carpenters are priced out of owning a home in 157 of the 208 metro markets studied, equipment operators are priced out of 173, long haul truck drivers 174, and construction laborers cannot afford to purchase a home in 196 of the 208 markets studied. With an annual salary of around $100,000, construction managers can afford to purchase a home in all but nine of the 208 homeownership markets studied.

On the rental side, although construction managers and carpenters could afford to rent a home in the majority of the 210 rental markets studied, equipment operators could not afford the typical rent for a two-bedroom apartment in 52 of the markets, long haul truck drivers in 57, and construction laborers were virtually priced out, unable to afford to rent a two-bedroom apartment in 161 of the rental markets studied. It is important to note that a two-bedroom apartment is what would typically be required for a family with one or more children.

Florida’s Rental Market
As mentioned, from 2007 to 2008 the average monthly cost of renting a two-bedroom apartment has become less affordable in all the Florida metropolitan areas studied. The study developed nationwide rankings of rents, from highest to lowest, for each metro area. Some of Florida’s metro areas climbed more than 10 or even 20 places closer to the position of most expensive. The largest increase in rental unaffordability for a two-bedroom apartment in Florida was seen in Pensacola, which went from a ranking of 182 in 2007 to 126 in 2008 ($755 per month) out of the 210 markets studied nationwide – jumping a staggering 56 spots in the rankings. Pensacola was followed closely by Ocala, moving from 183 to 131 in the rankings ($749), and Fort Walton Beach, going from a ranking of 139 to 98 ($816) in just one year. Florida’s largest city, Miami, moved from 32 to 26 ($1,156).

U.S. Metropolitan Area Rankings:
Homeownership and Rental Affordability Findings for More Than 200 U.S. Metropolitan Areas:
Fact Sheet – Most to Least Expensive Homeownership Markets in 2007 and 2008
Fact Sheet – Most to Least Expensive Rental Markets in 2007 and 2008
Fact Sheet – Changes in the Qualifying Income Needed to Purchase a Home from 2007 to 2008
Fact Sheet – Changes in Florida Rental Market Rankings from 2007 to 2008

Data Sources for Paycheck to Paycheck
Wage information is as of the fourth quarter 2008 and was provided by salary.com, a private provider of salary information, which maintains a database of salaries by geographic location.

"Construction-Related Occupations" are the occupations projected to be created as a result of the Federal Stimulus Package.

Home price data are from the third quarter 2007 and fourth quarter 2008 and include new and existing home sales figures provided by the National Association of Home Builders (NAHB). In select cases where the data from NAHB were not available, existing home sale price data from the National Association of Realtors are provided.

Following conventional mortgage underwriting guidelines, the study assumes that not more than 28 percent of household income should be used to pay the mortgage, property taxes and insurance. The study further assumes a downpayment of 10 percent.

Typical rents in each metropolitan area are based on the fiscal year 2009, and for comparison, the fiscal year 2007 Fair Market Rents issued by the U.S. Department of Housing and Urban Development. These are the rents in effect in the fourth quarter 2008 and third quarter 2007 respectively. The weighted average FY 2009 Fair Market Rent nationwide was $928 a month for a two-bedroom home, in comparison the FY 2007 Fair Market Rent was $848 (the comparable national figure for a one bedroom home is unavailable). The Hourly Wage Needed to Afford (found in the Paycheck to Paycheck online tables) is the hourly wage that must be earned so that this rent does not exceed 30 percent of income, a standard measure of affordability.

For all the details on this new study, and to look up housing affordability in your area, please go to the Paycheck to Paycheck online, interactive database.

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