Americans Finding It Harder to Buy a Home

Fewer than half of the adults and families in this country can afford a median-priced home, Census Bureau figures showed Thursday, confirming that the dream of home ownership is getting out of reach for a growing number of Americans.

A separate survey showed even fewer Californians able to buy homes.

Minorities and families headed by women are the least likely to be able to purchase a median-priced home, according to the Census study that was based on 1988 figures. Married couples with no children and anyone who already owns property are most likely to be able to afford an average house, it said.

Three-fourths of black and Latino families and 88% of renters are locked out of home ownership because of the costs, the study said. People under the age of 25 fared worst--with 94% unable to buy the median-priced home.

The most expensive house that married couples could afford on average cost $126,000, while, in general, most married renters could not afford the price of any home.

Renters were less likely to be able to buy a median-priced home for varying reasons. Almost half could not come up with enough cash for a down payment, 10% were too far in debt and 8% could not afford monthly mortgage payments. Nearly 40% of the renters could not afford the average home due to two or more of these factors.

Lowering down payments would make an additional 11% of renters eligible for home ownership, the study said.

“Those figures are really striking, with a lot of implications,” said Paul Leonard, a senior analyst at the Washington-based nonprofit Center on Budget and Policy Priorities. “Home ownership represents the major way Americans acquire wealth.”

The inability to buy houses was even more pronounced in California, according to statistics compiled by the California Assn. of Realtors. In March of this year, only 21% of California households earned the $63,790 income needed to buy a median-priced home costing $202,470. The state median household income is $29,000, according to association calculations.

In greater Los Angeles, just 20% of households can buy the $210,850 average-priced home because most households earn just half of the minimum $66,430 income needed to qualify for financing.

“There’s a certain disturbing trend in which people who work in the service sector cannot afford to live in the community where they work,” said John Shovan, a Stanford University professor and director of that institution’s Center for Economic Policy Research. “The fundamental problem is why income has not risen, not why housing is so expensive. Real wages have retreated back to where they were in 1960.”

Housing Affordabilty

Breakdown, in percent, of the maximum-priced housing that black and white families can afford to buy.

Whites

Can’t afford a home: 11%

Less than $20,000: 16%

$20,000 to $59,999: 12%

$60,000 to $99,999: 15%

Over $100,000: 46%

Blacks

Can’t afford a home: 40%

Less than $20,000: 21%

$20,000 to $59,999: 14%

$60,000 to $99,999: 11%

Over $100,000: 14%