County Incomes Still Lag Behind Housing : Chapman Study Finds Route to Home Ownership Not Easing
Although the cost of housing nationally had been catching up with Orange County’s often budget-breaking home prices during most of 1984 and 1985, the gap widened again in the third quarter of last year, according to Chapman College’s Center for Economic Research.
At the same time, the growth rate for median family income in the county dropped below the national pace.
So, while housing in the county continues to grow more affordable--partly as a result of developers’ efforts to build smaller units--home ownership still is out of the reach of more families than in the nation as a whole, according to Essie Adibi, the research center’s new director.
And Adibi said he now expects that gap to continue widening through the year.
Ratio Grows Locally
The economist said that “a ratio of price and income” determines whether housing is affordable. In Orange County during the third quarter of 1985, he said, the ratio grew locally while shrinking nationally.
Still, neither in Orange County nor nationally can a family earning the median annual income afford the median-priced house.
The Chapman study says that median family income in the United States for the third quarter was $27,563--enough, Adibi said, to buy a home priced at $74,200 but only 98.3% of the income required to buy a home with the national median price tag of $75,500.
But in Orange County, the study says, the median family income of $39,500 provided only 92.7% of the earnings required to qualify for a home with the local median price of $137,718. With the Orange County median income, a home buyer in the third quarter was limited to a house priced at $128,000, he said.
Adibi said that from the third quarter of 1984 to the third quarter of 1985, the median price of a home in Orange County increased 1.57% from $135,590, while the median price of a home nationwide dropped 0.9% from $76,200.
During the same period, the county’s median family income (for a four-person household) increased 5.4% from $37,467, while the nation’s median family income rose 6.1% from $25,970.
