Stretched too thin? You've got company

OK, penny pinchers, it's not just your imagination. It has gotten increasingly expensive to own a home in relation to income, and mortgage payments are only part of the picture.

A national study out today, "Stretched Thin: The Impact of Rising Housing Expenses on America's Owners and Renters, 2008," looks at the costs of housing beyond home loans between 1996 and 2006. The Center for Housing Policy study found that all major types of homeowner-related expenses rose faster than incomes during that decade.

Among findings from the research affiliate of the Washington, D.C.-based National Housing Conference, mortgage payments rose 46%, utilities 43%, property taxes 66% and homeowners insurance 83%, while homeowner incomes increased only 36.3%. Renters didn't fare much better. Rents rose 51% during the 10-year period studied, while renters' incomes rose only 31.4%. More information on housing-related topics is available the National Housing Conference's Open House Blog.

 

-- Lauren Beale

Your thoughts? Comments?

Photo: Dan Loh / Associated Press

Comments

[eprobert]

I'd suggest that ultimately this is globalization at work - we've been consuming more than our fair share for a long time. Now, we're just adjusting to the (lower) standard of living common in most developed countries. That means lower wages, and more expensive "necessities". Say goodby to the accouterments of yuppie life - the giant condo/house, SUV and big screen.

There's nothing moralistic about it, it's just part of the inevitable race to the bottom.

[Jeffreez]

The mortgage increase is misleading. That's the teaser increase (46%). The real increase was/is 300%...aka the hump that broke the camels back.

[MyLessThanPrimeBeef]

From 1978 to 2008, nightly entertainment and news went from free for those got them from their TV to $49.99 per month, for a annual rate of infinity.

In the same period, the cost of foot care went from, if you wore leather shoes back then and wash regularly, zero to $5.99 (cost of a month supply of desenex) per month, as it's nearly impossible to buy breathable genuine leather sole shoes these days. Again, the annualized rate works out to be infinite.

In 1978, for an average family renting in an average neighborhood, the cost for an average grade school education was free, i.e. zero. Today, that avearge family renting in an average neighborhood would have to spend at least $20K a year per kid for an average education privately. Again, the rate of increase is infinity.

In 1978, the average monthly cost of potable drinking water was free. Today, you have to spend, depending on the filtration system or if you buy bottled water, mininum $10 a month per person. Agian, the rate is infinite.

In 1978, a six-month old video from the library was free as it is today. Annualized rate of infaltion: zero. I consider that the only worthwhile activity of government.

[Charles Winborne]

This is going to be hard for many -- this "race to the bottom." A few, I suspect will begin to rediscover "Quality of Life" as a funciton of relationships, craft, and impeccable action. America, by virtue of this crisis, is truly blessed.

[Lou]

The sad thing is that people were willing to stretch to pay (mortgages anyway) because they were so convinced by the propagandha that housing was a good investment and they'll double their investment.

We need to get that mentality out of our cultutre.

[schmendric]

I was just 19 when my father died and my mother & I became saddled with a house in which R.E. taxes rose so quickly they soon surpassed our mortgage payments. I resolved then to own only income property. The only times I have ever had reason for regret was when I strayed from that conviction. A single family home is a luxury that
has become increasingly too expensive for the average person.

[The Original RZ]

I really wish that consumers would realize how much power they have in setting prices. If they refused to buy items that are overpriced (houses) or only bought other items - food, clothes, cars, etc. - when they are on sale, you'd see a big shift downwards in pricing. Of course there's a limit to how prices could go due to costs, but most large businesses make a huge profit because people are not discerning enough with their purchases.

[sheila]

and between 1980 and 2006, "executive compensation" increased 600%. aaaaaaaahhhhhh. that might explain one or two of these statistics, might it not? start factoring in the grotesque, exponential compensation of the past 2 years and we are really getting somewhere.

wealth is neither created nor destroyed. it is simply redistributed. usually without regard to the value of the work performed by the recipient. what people pretend is a "globalized free market" is really called a ponzi scheme and we are witnessing one of its many collapses right now. totally predicatble. but people's greed will likely lead them right back into the same system, certain that this time they will "beat the system." not gonna happen...

[John]

It's still cheap to rent / own, it's just our expectations that have gotten stretched.

There are all sorts of lovely neighborhoods in this country where you can own your own home for less than $200k and send your kids to decent schools.

But we all want to live in L.A., preferably not too far from the beach or the hills, with perfect weather and shiny new cars, and pay the extra $ so we don't have to send our kids to LAUSD, and the costs grow and grow.

We've made the choices, we get to live with them. If living with our past choices becomes onerous, then we get to make new choices.

Between global warming and the real estate disaster, Detroit might be a good option, as you can own a home outright for less than $20k.

[Amelia]

Ponzi scheme! That's so true...a forest...couldn't see because I was hitting my head on too many branches in that forest.
Another point others suggested and is so true...greed and the-get something-for-nothing concept.

[some lady]

John, if I could get my entire extended family to move somewhere else with me I'd go. But to leave the state my family has been in for 81 years, where my entire family lives, would be a pretty bitter goodbye. Take my kids away from their grandparents, aunts, uncles, cousins? Nope. So I just go on renting a really crappy house because $2k a month is comparatively "cheap."

[Rob]

Among findings from the research affiliate of the Washington, D.C.-based National Housing Conference, mortgage payments rose 46%, utilities 43%, property taxes 66% and homeowners insurance 83%, while homeowner incomes increased only 36.3%.