Bubble?
Housing prices are far outstripping salary increases for low- and moderate-income jobs, putting the American dream of owning a home beyond the reach of teachers, firefighters and other community workers in many cities, said a study being released Tuesday. The report, by a coalition advocating affordable housing, found that even cities once considered affordable, such as Tulsa, Okla., are rapidly becoming too pricey for lower-income workers such as janitors and retail sales employees. The study found the median price of a home in the United States rose 20 percent in just 18 months, to $225,000. During the same period, wages for teachers, firefighters and nurses in most cities remained flat or increased slightly, but still fell far short of the annual salary needed to buy a home, the report from the Center for Housing Policy said. For example, the median household income for a nurse rose 10 percent between 2003 and 2005, to about $36,000. For a firefighter, wages were flat, remaining at about $37,000 a year. Those salaries don't come close to the $71,000 annual income needed to qualify to purchase a $225,000 home. The number is based on a down payment of 10 percent. "It's not just the level of housing prices versus wages, but the fact that, especially in some areas, the housing prices are growing so much faster," said Barbara Lipman, the research director for the center. "It's creating this dynamic where people who work these jobs must feel like they'll never catch up. The dream of home ownership may be unattainable," she said.
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