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37 » VISIT US ONLINE @ DSNEWS.COM HOMEOWNERSHIP: MORE AFFORDABLE THAN WE THOUGHT? Research by the Urban Institute suggests that affordability might not be as big of a hindrance as we thought. Taking issue with the fact that traditional affordability indexes rely on median incomes and median housing costs, researchers at the Urban Institute's Housing Finance Policy Center delved deeper into the matter by looking at all income levels in the top 100 metros in the nation. e policy center's housing affordability for renters index (HARI) compares the income levels of renters to those of recent homebuyers to determine how many current renters could afford to purchase a home in their market. It is important to note that this index does not take into account credit scores, down payment levels, or other barriers to homeownership. It is simply focused on income as a means of affordability. Overall, affordability as of 2017 was higher than it was in 2006, but lower than in 2009, and about the same as the year prior. From 2006 to 2017, there was a 6 percent rise in the number of renters who could afford to purchase a home in their area. About 27 percent of renters could afford to purchase a home in 2017, and across the largest metropolitan statistical areas (MSAs), affordability ranged between 20 and 31 percent, according to the research. Higher priced markets were not automatically the least affordable markets because renters in those markets tended have incomes comparable to homebuyers living in those markets. For example, the research revealed that Washington D.C. has one of the highest affordability rates for renters living in the MSA at 30 percent. On the other hand, Houston, Texas, has an affordability rate of 23 percent among renters currently living in the MSA. While home prices may be higher in the D.C. area, incomes are as well. About 9 percent of renters in Houston earn more than $90,000, compared to 33 percent in D.C. San Francisco and Washington D.C., had the highest share of high-income new homeowners. St. Louis had the lowest share of high-income new homeowners. e highest affordability rate among all 100 MSAs was 34 percent in Cape Coral-Fort Myers, Florida, followed by Las Vegas-Henderson-Paradise, Nevada at 32 percent, and Lakeland-Winter Haven, Florida, and Phoenix-Mesa-Scottsdale, Arizona, which both had rates of 30 percent. e lowest affordability rate was 18 percent in Los Angeles-Long Beach-Anaheim, California. San Diego-Carlsbad, California, and Oxnard-ousand Oaks Ventura, California both had affordability rates of 20 percent; and McAllen-Edinburg-Mission, Texas, and Durham, Chapel Hill, North Carolina both had affordability rates of 21 percent. While some higher-priced markets remain within reach for local residents, they may be out of reach for renters looking to move to the area from another MSA. While 30 percent of renters in Washington D.C., can afford a home in the area, only 17 percent of renters across the nation could afford a home in D.C. Similarly, in San Francisco, 25 percent of local renters can afford a home, but only 6 percent of renters nationwide can afford a home in the MSA. On the flipside, 26 percent of renters in Detroit can afford a home in the area, but 30 percent of renters across the nation can afford a home in the MSA.

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