If housing is as affordable as the industry keeps telling us, why can't I find a house at a price I can afford?
A reader posed that question to me a few weeks back, and I attempted for a couple of hours to craft a response.
I suppose the answer is that while houses are not free, the sale of 831,000 foreclosure homes - bank-owned, delinquent, and slated for auction - in 2010, according to RealtyTrac, at heavily discounted prices makes them more affordable than at the height of the boom in 2005.
The perspective I'm providing today is that of the Center for Housing Policy, funded by the MacArthur Foundation, and may differ from that of real estate or homebuilder associations.
Presenting this information doesn't mean that I agree or disagree with it; send your comments to email@example.com.
The study looks at housing-affordability trends for working households in 2008 and 2009. It shows that nearly one in four working households spends more than half its income on housing costs.
What is more, "despite falling home values and the perception that rents have dipped nationwide, housing affordability worsened significantly for working owners and renters" in those years.
Here are the numbers:
There were 46.2 million working households in 2009.
10.5 million, or 22.8 percent, spent more than 50 percent of their income on housing costs.
This was 600,000 more households than in 2008.
The increase occurred even as the number of working households fell by 1.1 million, in part because of the difficulty in finding jobs.
Renters took a bigger hit than homeowners. One-fourth of all renters had a severe housing-cost burden in 2009, up from 22.1 percent in 2008. For working owners, it was 20.1 percent in 2008, and 21.2 percent in 2009.
New Jersey was one of the states in which the numbers of these "cost-burdened households" increased in 2009 over 2008 and, at the same time, exceeded the national average.
New Jersey, with 1.17 million working households in 2009, had 343,516 that fell in the severe-cost category, or 29 percent. In 2008, it had been 28 percent.
Pennsylvania, with 1.92 million working households, had 323,499 defined as severe-cost, or 17 percent, up from 16 percent in 2008.
Florida and California tied for first with 33 percent. Iowa and North Dakota were the lowest at 12 percent.
The Philadelphia metro area, which includes Camden and Wilmington, had 915,137 working households and 184,701, or 20 percent, in the severe-cost category. In 2008, it was 19 percent.
The worst was Miami, with 42 percent of 752,041 households in the severe-cost category.
If you are asking why this happened, here's what the study considers underlying causes:
The average number of hours at work per week fell from 47 to 45. Renters lost four hours; owners saw no change in 2009 from 2008.
Nominal household income fell 4 percent, with a 5 percent drop for renters and 4 percent for owners.
Housing costs rose for renters, while those for owners retreated slightly, but not enough to compensate for falling incomes, the study said.
The monthly median cost for owners fell $11 from 2008 to 2009, but the number paying second mortgages fell by 1.2 million, and payments on the loans fell $20 a month. Other costs stayed the same.
The typical working renter, on the other hand, faced a higher monthly payment in 2009, with the median gross rent, including contract rent and utilities, increasing 2.5 percent, from $800 in 2008 to $820 in 2009.
Inquirer real estate writer Alan J. Heavens is the author of "Remodeling on the Money" (Kaplan Publishing). His home improvement column appears Fridays in Home & Design.