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Majority of homeowners now live in what is deemed unaffordable housing

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Unaffordable housing across the board

According to the U.S. Census Bureau, rents are increasing while paychecks are not. Over half of Americans that rent put at least 30 percent of their household income toward rent while roughly 25 percent of renters pay out half of their income to their landlord.

The federal government says housing is unaffordable once it surpasses the 30 percent threshold, putting half of America in the dangerous range of paying more for rent than what the government deems unaffordable, and the ratio of renters in this category is growing.

Homeowners are not faring any better, as 38 percent of homeowners pay over 30 percent of their income on their mortgage while 15 percent spend at least half of their income on their house payment. More homeowners are now in the unaffordable range and this number is also rising, but at a slower pace than renters.

Rents are predicted to continue rising for an unforeseeable period with more homeowners losing their homes to foreclosures, selling their home as a short sale, or simply walking away, mobilizing a growing number of renters.

American challenges

Unemployment continues to suffer and with one in three Americans saying job instability is a top obstacle to buying a home, it is likely that many renters fears relating to job stability.

As rents rise and mortgages reset, Census Bureau data shows housing is becoming less affordable no matter if one rents or owns.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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53 Comments

53 Comments

  1. Joe Rivera

    September 23, 2011 at 7:05 am

    "Cooperative Housing" is the answer to the housing problem. If people can't afford to rent or own any property on their own, they will have to form "cooperative housing groups". As long as they are still working, they can live in a "cooperative housing complex" where 2 or more families have their own bedrooms and bathrooms, but share large kitchens, dining rooms, and "family rooms". Older, large apartment complexes can be purchased and converted to "cooperative housing". "Cooperative Housing" is NOT Government Housing. It is a private, real estate investment entity, just like regular apartment complexes.

  2. Dan O'Halloran

    September 23, 2011 at 7:40 am

    Yikes that's pretty bleak information. If homeowners can get approved for a refinance that should make those payment ratios a bit better. Still can't believe we are talking about rates in the 3% range!

  3. Joe Rivera

    September 23, 2011 at 7:57 am

    There is no shame in renting versus "owning". Renting is always, always, cheaper than owning, no matter what the "experts" tell you. Your "american dream" does NOT have to be "owning" any property. Your "american dream" is living in a "reasonable" dwelling and putting a few extra bucks away for your retirement, which is MUCH, MORE IMPORTANT than living in a "pretty" property you can't afford anyway. Besides that, you really NEVER "own" any property that has a mortgage on it. The Bank owns your property. You are just paying "rent" to live there! You ONLY "own" property, when you buy it with CASH! If you can't buy it with CASH, rent instead!

  4. Greg Cook

    September 23, 2011 at 9:05 am

    Tara, another case for buying over renting.
    The figures are obviously based on gross income, while payments (rent or mortgage) are paid from net income.
    A homeowner can adjust their withholding to increase their disposable income while a renter doesn't have that luxury.

  5. Randy Pereira

    September 26, 2011 at 4:32 pm

    Very interesting report, but we need to do our own research for our respective location of expertise.
    Some areas it is cheaper to rent, than to own… other areas it is the complete opposite.

    It isn't about buying that "dream home"… but making the best possible investment decision for your short and/or longterm financial goals.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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