Porch’s study compared the average price of a house in each metropolitan area and the median income of renter households in that area, then calculated how many renters would spend 30% or less of their income on mortgage payments for an average home. in their region. Most financial experts recommend keeping housing costs at 30% or less of household income for affordability.
Porch researchers found that:
· The average home in the United States costs seven times the national average household income.
· Home ownership is unaffordable for the majority of renters in 71% of metropolitan areas.
· In 13 metropolitan areas, including 10 in California, at least 90% of renters do not own a home. The three metropolitan areas outside of California are in Cape Cod, Hawaii and Boulder, Colorado.
In the DC metro area, 70% of renters cannot afford to buy a home, according to Porch’s analysis. Their calculations revealed that the price of an average house is $526,296 and that 30% of households rent in metropolitan areas. These renter households have a median income of $56,400, while the median income needed to purchase the average home in the area is $64,055.
Many housing programs are in place to help renters become homeowners, including down payment assistance programs and loan programs through the Federal Housing Administration (FHA), Veterans Affairs ( VA) and the Department of Agriculture (USDA).
To help first-time buyers compete with investors, the Department of Housing and Urban Development recently extended the period during which homeowners can bid on foreclosures now held by HUD. Starting March 1, businesses and investors will have to wait 30 days before they can bid on certain HUD-owned properties.
Previously, buyers only had 15 days before investors were allowed to bid on properties. These one- to four-unit homes must qualify for FHA 203(b) financing, which can be used to wrap repair costs into a 30-year fixed-rate loan.