At a time when the economic insecurity of middle-class Americans is growing, one bedrock is the soaring values of single-family homes. But for the younger and less affluent, fast-mounting home values are making it more and more difficult to achieve the dream of a home.
This challenge can be spotlighted when the average sale price of a single-family home is compared with the median family income.
In the Baltimore region five years ago, it generally took two to 2 1/2 times the median family income to purchase a formerly owned single-family home. Last year it took three to four times the median income to purchase a used home.
The growing divide between income and home costs was most visible in Carroll and Howard counties, where it took nearly four times the median income to buy an average home. Not surprisingly, the region's most-affordable housing could be found in Baltimore and in relatively remote Harford.
Real estate experts note that with low interest rates and low down payments, many middle-class families can afford more-expensive houses than in earlier decades. The National Association of Realtors estimates that in 2004 it took only about 19 percent of the national median family income to make the monthly payment on a median-priced, existing single-family home, up only about 1 percent from 2002.
But suburban real estate taxes are rising with home values. History tells us that interest rates will eventually rise, and currently popular variable mortgage rates will rise with them. And with energy, health care and other key costs rising significantly faster than family incomes, the burden of homeownership appears certain to grow significantly.
For a growing share of families -- those earning $40,000 or less -- the homeownership options in areas with good schools and reasonable commutes are becoming increasingly limited.