Skip to main content

Homeownership becoming less affordable for middle class, report says

November 1, 2004

Homeownership becoming less affordable for middle class, report says

Homes are becoming less affordable for many middle-class Americans, according to a recent special report from the Fannie Mae Foundation.

The report, titled Homeownership Affordability in Urban America: Past and Future,gauges home affordability trends for median-income Americans, nationally and in 11 selected metropolitan areas. Findings are based on data and projections covering the period 1990-2008.

On a national level, the report predicts that beginning this year, a median-income first-time homebuyer will no longer qualify for a mortgage on a median-priced home. By 2007, median-income repeat homebuyers will experience affordability challenges when attempting to purchase median-priced homes. Examining trends in the 11 selected metropolitan areas, the report predicts that only in Atlanta, Houston and Philadelphia will median-priced homes continue to be affordable to median-income buyers. Of the other eight selected markets, median-priced homes in four (Chicago, Denver, Seattle and Washington, D.C.) are projected to shift from affordable to unaffordable for median-income families. Median-priced homes in the remaining four markets (Boston, Los Angeles, New York and San Francisco) have been unaffordable for median-income families for some time. In most of the 11 metropolitan areas, the report states that an average-wage schoolteacher, nurse, police officer or firefighter lacks sufficient income to purchase a median-priced home.

To access the full report, visit www.fanniemaefoundation.org/programs/pdf/ 042904_housing_affordability.pdf.