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Pay Raises Remain Weak as Housing Prices Surge
The wages of many public servants — policy officers, teachers, fire fighters and nurses, among others — are not keeping pace with the cost of housing, according to a new study from the Center for Housing Policy, the research affiliate of the National Housing Conference. The study finds that as housing prices rise across the country, a growing number of working Americans cannot afford housing in the communities where they work.
The median price of a home in the U.S. rose 20% in just a year and a half, during a time when raises for key community workers remained weak, even stagnant, by comparison, according to the study.
“This study makes it clear that meeting the housing needs of our nation’s working families is a tough challenge,” said NAHB President David Wilson. “We have an imbalance between demand for housing and supply, and that is driving up prices, especially in the hottest markets. This problem will only get worse unless communities find a way to better match supply and demand.”
The study, “Paycheck to Paycheck: Wages and the Cost of Housing in America,” found that from the fourth quarter 2003 to the first quarter 2005 the cost of a median priced home increased from $186,000 to $225,000, or 20%. At the same time, the annual income needed to qualify to purchase a home grew from $54,855 to $71,354.
Yet, the wages for key community workers such as elementary school teachers, police officers, licensed practical nurses, retail salespersons and janitors in the majority of cities nationwide remained flat and, in some metropolitan areas, significantly below the amount needed to purchase a home.
In addition to the national assessment of housing affordability, the study also compares homeownership and rental affordability findings with median community wages for 63 occupations in 183 metropolitan areas. To access this information on an interactive database, click here.
The 10 least affordable markets are all in California, according to the study, but housing affordability problems are fast becoming a concern across the county.
“Across the nation we are seeing a growing disparity between the skyrocketing home prices of recent years and the minimal increase, if not flattening, in wages for our nation’s community workers,” said Barbara Lipman, the center’s research director. “Additionally, the disturbing trend of retail salespersons and janitors, and those in similar wage groups, paying in excess of what is considered affordable in order to rent a one- or two-bedroom apartment continues in metropolitan areas throughout the country.”
For more information about workforce housing and other housing affordability issues, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.
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