In an ideal market, families with an annual median income of $69,800 should be able to afford a median-price, single-family home, but in DuPage County that’s only about half the wages needed to buy that $360,000 house, according to a new report.

At best, that income could support a home priced at $200,000, according to an official at the DuPage Homeownership Center, which issued its annual Labor Day Housing Affordability Index report Friday. And few of those homes are available in DuPage, real estate agents say.

The DuPage median income is only 55 percent of what’s needed to buy a median-price house in the county, the report states.
The index used in the report is based on a concept created by the National Association of Realtors and provides an indication of whether a housing market is in balance, said Dru Bergman, executive director of the Homeownership Center.

“The conventional wisdom is that a family earning the median income for a given area should be able to afford the median-priced home in that area,” Bergman said. “An index of 100 would mean that the market is in balance. Clearly in DuPage, with an index of just 55, housing prices are far outpacing the incomes of many working families.” And indexes from previous years indicate a worsening situation, the report states. Last year’s index was 59, and in 2005 it was 63.

The report uses home-price figures from the Illinois Association of Realtors for the second quarter of 2007 and income statistics from the U.S. Department of Housing and Urban Development.

Housing and finance experts recommend that a family spend no more than 30 percent of its income on housing. Applying that theory to typical down payment and mortgage rates, it would take an income of at least $126,120 to buy a $360,000 median-price home, the report states.

The median family income in DuPage is $69,800, meaning half the incomes in the county are more and half are less, according to the report.

Multiple Listing Service figures show there were 6,983 single-family detached homes for sale in DuPage on Friday, and 79 of them were listed at $200,000 or less, said Josie Morrison, a member of a Homeownership Center committee on affordability and a real estate sales associate at Re/Max Suburban in Wheaton.

Morrison said, however, that there were 1,596 attached residences, such as townhouses and condominiums, listed for sale at $200,000 or less.
Source:

http://www.chicagotribune.com/news/local/chi-duhousing_04sep04,0,3374660.story