Staff Report
Published April 16, 2009
The monthly cost of homeownership continues to drop in South Carolina and across the country, leading a California real estate consulting firm to call this the most attractive homebuying opportunity since 1971.
The Housing Cost to Income Ratio measures the relationship between the median-priced single-family home and the median household income. The ratio is computed and reported nationally, as well as for individual communities.
Nationally, the monthly cost of homeownership has declined 43% from its peak in July 2006. The current ratio of 25% is a decline from 44% in 2006.
“These numbers are significant,” said Hal Von Nessen, president of RESH Marketing and host of the weekly radio program “Your New Home Columbia.” “Most buyers are concerned with the monthly cash requirement for their home, be it an apartment or single-family home. With interest rates declining to under 5%, and with the moderation in home price increases in South Carolina, the total cost to buy a new home has been declining.”
Recent figures from the Bureau of Labor Statistics, Freddie Mac, Economy.com and the Irvine, Calif., consulting firm John Burns Consulting indicate that, except for in coastal areas, housing is more affordable in South Carolina than in most other areas of the country.
Housing Cost to Income Ratio for S.C. Communities
| City Anderson Charleston Columbia Florence Greenville Myrtle Beach Spartanburg | Housing Cost/Income 18% 26% 18% 22% 23% 30% 21% |
These ratios compare to 17% in Atlanta, 22% in Charlotte and 25% in Raleigh.
Because of the moderation in housing prices and lower interest rates, the National Association of Home Builders reports that 55 million families — half of all U.S. Households — can afford today’s national average $200,000 median-priced home.
Depending on the area, more than 40% of South Carolinians can afford the median-priced home in their community. Other factors determine the specifics of how much home an individual is qualified to purchase, but the moderation in prices, tax credits, low interest rates and a large selection of homes available mean monthly payments are often lower than rental expenses for homes priced below the median.
