Home affordability / by kevin murray

The most important material possession that you will ever own in your life is your home.   Your home is your castle, your sanctuary, and your own private domain.   How important home ownership is to you, depends upon the person, but I consider the ownership of your own property to be a fundamental desire and a universal right.


The Census Bureau reported a home ownership rate of 65.4 percent for the 1st quarter of 2012, but I would like to compare that percentage to the home ownership rate of Eisenhower's first administration which was about 55 percent.  That seems like a very nice percentage increase over the ensuing sixty years but that increase is very deceptive because the nuclear family has changed significantly over these last sixty years in the sense of duties and structure.


According to bls.gov the:  "share of married-couple families with children where both parents worked was 59.0 percent in 2012."  In 1953, that percentage would have been around 12.0 percent.  That is an increase of nearly 500 percent in sixty years.  Therefore it seems safe to assume that it takes in aggregate more overall labor to afford a home in 2012 than it did in 1953.   That isn't progress by any stretch of the imagination. 


However, we aren't exactly comparing apples to apples, since homes today are not the same as homes in the 1950s in the sense of size and often attributes.  In the 1950s the average home size in America was approximately 1000 sq ft, whereas the median size of a new home in 2010 was 2,169 sq ft.  What is puzzling is that during this time of increasing home sizes, the average size of an American family has declined from 3.59 per household in 1955 to just 2.63 in 2009.


Additionally, according to mybudget360.com the median income for 1950 was $3,319 with the median home price of $7,354 and the median car price of $1,510.  In 2009 those numbers were respectively: $52,029 for income, $197,000 for housing, and for your car $23,050.  So that we find in 1950 the median home price to the median income was a ratio of 221 percent, whereas in 2009 that ratio now sits at 379 percent which is a substantial increase.


With middle class budgets being stretch to the limit and with dual-incomes already achieved, what can be done to alleviate this overburdening of the American dream?  It would seem that the wisest thing to do is to create more housing which is smaller, denser, designed more practically for today's world, and also more cost efficient in regards to materials, in order to make that housing more affordable for our citizens. 


Buying a home is an important step in establishing yourself as a resident with roots within your community.  This financial decision has important and critical lifetime ramifications and therefore the decision should be carefully considered, discussed, and contemplated before the signing of the documents.  Housing is illiquid, and doesn't always appreciate, nor does it always keep up with inflation.  It is however a place to live, to make memories, and to enjoy.