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Report: Home ownership becomes more affordable here in Q1

Rochester Business Journal
August 16, 2013

The median price of a home in the Rochester area has increased over the last year, but the income needed to purchase a home has decreased, a new report from the Center for Housing Policy shows.

The report by the research affiliate of the National Housing Conference, “Paycheck to Paycheck,” ranked Rochester 162nd of more than 200 of the country’s metro areas in terms of the change in income needed to buy a median-priced home. In the first quarter the median home price increased to $119,000 from $117,000 a year ago, while the qualifying income dropped more than 4 percent to $31,574 from $33,042.

In Buffalo, the median home price increased to $110,000 in the first quarter from $94,000 a year ago, while the qualifying income to purchase a home increased from $26,547 to $29,186. The metro area ranked 38th on the list of change in income needed.

Syracuse ranked 180th on the list as the median home price fell from $106,000 in the first quarter last year to $105,000 this year. Qualifying income fell nearly 7 percent to $27,860 from $29,936.

Overall, Rochester ranked 160th in terms of homeownership costs, moving down the list from 151st a year ago. Buffalo ranked 173rd, while Syracuse ranked 181st on the list of most to least expensive metro areas for homeownership.

Qualifying income is the annual income needed to qualify for a mortgage, calculated using the average prevailing interest rate, assuming a 10 percent down payment and the use of private mortgage insurance, and includes principal, interest, taxes and insurance, the report states.

Rochester ranked 104th of 207 metro areas for rental costs, with an average monthly rent of $859 for a two-bedroom apartment. Syracuse ranked 134th with an average rental cost of $784, while Buffalo ranked 165th with a rental cost of $736 a month.

The report focuses primarily on travel and tourism workers nationwide, noting in many cases workers in the industry struggle to cover housing costs, both in terms of rental costs and homeownership.

“The data show that working hard is not enough to make ends meet,” said report co-author Janet Viveiros. “Americans are spending more on vacations, but many of the workers fixing their cars before a long road trip, cleaning their hotel rooms or serving their meals are struggling to afford basic expenses like housing.”

The report shows income for housekeepers and wait staff were not enough to afford the fair-market rent for a two-bedroom apartment in any of the 207 metro areas studied, noting also that the slow housing recovery in some markets made homeownership more affordable than renting.

In Rochester, the report shows, housekeepers earn an average of $22,497 annually, while wait staff earn $23,251.

“The demand for rental housing has increased substantially in some markets, putting upward pressure on rents,” said Lisa Sturtevant, Center for Housing Policy director and National Housing Conference vice president for research. “And as prices and rents are rising, wages have been steady at best, and many working families remain priced out of many markets.”

(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.


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