Despite the fact that the home prices have taken a deep dive, the majority of Floridians are finding that housing is still somewhat unaffordable. Translation: people are spending more of their money on mortgages or rent.

The government standard tells us that a home should cost 30 percent or less of annual (combined) household income (HHI), with housing costs comprising of the following: mortgage payment or rent, taxes, insurance, and utilities. However, over 40 million Americans spent more than 30 percent of their HHI on housing --this includes both owners and renters. Predictably, the total number of homeowners has dropped this year, while the number of renters increased.

The government reasons that those who pay more than 30 percent of their income for housing costs are in breach of the affordable housing limit. In Florida, nearly three in five homeowners are included in this "unaffordable" bracket, one of the highest in the country after California.

But, perhaps people are just used to paying more for housing than in the past. In 2008, the people paying 30 percent or more has stabilized over the last two years. Does the government equation need to be adjusted? It may not be a bad idea as a study by USA Today and the Joint Center for Housing Studies at Harvard University revealed that 25 percent of renters are paying one-half or more of their annual income on rent!

"Although housing affordability for newly purchased homes has improved, overall affordability for renters or owners is unchanged or worse because of the economy," says Daniel McCue, research analyst at Harvard's Joint Center for Housing Studies. "People are still hurting."

 

To find affordable housing in your budget, contact Roman Pavlik on his Website, www.SouthFloridaRealtySource.com