The Role of Job Stability in Avoiding House Repossession
The National Housing Conference’s research affiliate, the Center for Housing Policy, has released the study, titled “Paycheck to paycheck: Wages and the cost of housing in America,” which showed a correlation between job stability and the capability to avoid house repossession.
The study examines the fundamental changes occurring in rental markets and in homeownership from 2007 and 2008 during the crash of the housing market.
Funded by the Federal Home Loan Mortgage Corp., the study showed a gap between earnings and the cost of renting or owning a home. According to the Center for Housing Policy research associate Maya Brennan, the issue is about housing affordability. She noted that despite the decline in home prices and the increase in the number of foreclosures, there exist a gap between earnings and the cost of housing.
The study pointed out that some places are more expensive than others, especially in areas where housing values increase faster. Brennan cited as an example the state of Florida which is one of the states hardest hit by the foreclosure crisis.
She said that since 2007, the rental market in Florida has become less affordable, indicating that former homeowners were not able to purchase their own homes, thus putting pressure on the state’s rental market.
And because of the foreclosure crisis that has been rapidly spreading across the country, some properties are not converting into rental units fast enough to accommodate the increasing demand for rental housing, Brennan said.
On a positive note, the study found out that home affordability has been improving significantly for several years now. However, the study noted that majority of housing markets have experienced a decline in the income needed to buy a home. Therefore, home affordability may be improving but is not enough to allow people to become homeowners.
Also examined by the Center for Housing Policy’s study was how the Obama Administration’s economic stimulus program might affect home affordability for workers providing community jobs, such as janitorial and retail sales.
According to Brennan, for families with a working police office member, nine leasing markets were not within their affordability level. Meanwhile, construction workers were also having difficulty renting or owning a home despite working full time.
Brennan pointed out that as house repossession continues and housing values decline further, more places will become affordable.
