Most middle class still can’t buy a house

Prices are falling down, but the price is still far from affordable from the middle class. Most of them still cannot buy homes of their own.

According to a recent report by the Center for Housing Policy, despite the decreasing house prices, middle class in America is not able to buy a house for themselves because the house prices are high enough an they do not earn enough to pay for it.

The study compared 201 metro areas to find out the housing costs. They took into account 60 major vocations and their salaries. Among the vocations compared were those of fireman, police and teachers.

Let’s see what’s there in Chicago

Cost of a median home $262,000

Taking 10 percent down and 28 percent as spending for gross income, a buyer needs to earn $85,589, if he wants to buy a home in Chicago.

But the median salaries of middle class workers are far lower than that. Salaries -

Registered nurses - $63,938

Customer Service representatives - $39,876

Office Clerks - $42,441

Salespeople - $23,056

Among all the markets surveyed, these employees can buy a home only in a few selected ones. If the prices come down more, then the affordability will improve more. Again the mortgage rates are coming down. A 30 year mortgage is available at 6.7 percent median rate and it is 5.48 percent at the lowest.  As the mortgage rates go down, so the amount payable per month will go down which will ensure that these middle class employees also buy a home of their own.