Home prices may be falling, but in parts of Virginia and the Washington metro area, more people are struggling to pay mortgages and rent now than in 2005, according to statistics from an agency that tracks housing costs.
“Indeed,” according to the Center for Housing Policy’s December “Housing Affordability Trends for Working Households,” “the ratio of home prices to incomes has fallen, thus improving affordability for prospective homebuyers. … Given these trends, it is tempting to assume that the foreclosure crisis, for all of its drawbacks, has at least solved the country’s housing affordability crisis.”
But not so, the report states.
“A close look at the data shows that rather than improving, housing affordability actually worsened slightly between 2005 and 2008,” due largely to rising home-related costs for those who own rather than rent, the report continues.
In this three-year period, the percentage of households with acute home affordability issues — where more than 50 percent of income was spent on housing related costs — rose a point to 15 percent.
In Virginia, the portion of homeowners and renters with severe financial burdens stood at 16 percent in 2005. In 2008, the portion rose to 18 percent — or by 232,785 households, the report found. For the District of Columbia, those determined to have severe housing cost burdens rose from 19 percent of owners and renters to 22 percent.
It’s the Northern Virginia area that’s been especially at risk for financial struggles, according to the figures in the report.
In 2005, the number of those in the Washington-Arlington-Alexandria area who paid more than 50 percent of income for housing-related costs stood at 18 percent of owners and renters. By 2008, this level was 22 percent. And in the Virginia Beach-Norfolk-Newport News area, 16 percent of homeowners and renters spent the bulk of income on home-related costs in 2005, compared to 19 percent three years later, the report cited.
Staff writer Cheryl Chumley can be reached at 703-670-1907.
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