What is Affordable?

 

!        Housing costs should not be more than 30-40% of your income

 

!        Don’t forget to factor in the costs for

 

"         Utilities

 

"         Insurance (whether renters’ or owners’)

 

"         And if you are an owner

$ Real estate taxes and

$ An allowance for repairs and replacements

 

!        When you don’t know the utilities and other costs, just stick with 30% of income as a rule of thumb for affordability.

 

 

 

What can Washington County Families Afford?

 

!        Median income for a family of 4 is $61,500[1]

 

!        Do the math, here is 30% of monthly income

 

% of median income for a family of four

30% of median

50% of median

80% of median

100% of median

120% of median

Median

18,450

30,750

49,200

61,500

73,800

Monthly income

1,538

2,563

4,100

5,125

6,150

30% of monthly income

461

769

1,230

1,538

1,845

 

!        Who is already paying too much according to this 30% measure?[2]

 

% of median

less than 30%

30 to 50%

50 to 80%

80 to 100%

# households

5,808

5,115

8,930

2,489

Burden >30%

4,750

2,445

2,366

1,372

            %

81.78%

47.80%

26.50%

55.12%

 

 

 

Rentals

 

51 of the 69 listings in the Herald Mail online on January 19, 2007 were for 3-bedroom units:

 

!        There are NO rentals the families earning less than 30% of local median could afford

 

!        There are two (2) offerings for the families earning between 30 and 50% of median income to consider

 

!        The families earning between 50 and 80% of median have 37 possible choices and

 

!        The families above 100% of median can rent anything we see currently advertized on the market

 

 

Ownership

 

But can the families in the 100-120% of median group afford to purchase a home?

 

!        The most modestly priced 3-BR homes on public water and sewer in the present market start at $189,900.

 

!        If our family borrows $190,000 for 30 years at 6.25% interest, their mortgage payment will be $750/month.

 

!        Allowing $200/month for taxes and insurance and $250/month for utilities[3], the family’s gross housing cost is $1,200/month, and this budget figure does not have a monthly set aside for repairs or upgrades.

 

!        Families at 80% to 100% of median income can just barely afford to buy starter homes originally built in the 1940s and 1950s where the presence of lead-based paint would be a concern for young parents.

 

!        Newer starter homes built after 1960 tend to be priced at $250,000, driving the gross monthly expense before allowing for repairs to $1,510/month and leaving the families at 100% of median behind.


[1]        Last HUD published table was issued on March 8, 2006.

[2]        From HUD’s CHAS Data Book as of the 2000census

[3]        Trash collection - $10, electric for hot water - $27, electric for cooking - $6, other electric - $28, natural gas - $115, and water and sewer in the area just outside the City of Hagerstown - $63