With housing prices still low around the country despite some recent growth, many Americans are still facing problems affording housing costs.
According to a recent survey conducted by Poverty & Race Research Action Council, close to half of the African American and Hispanic families in the country have insufficient income to afford a two-bedroom apartment at average fair market value.
The study was based on analysis of Out of Reach 2013, which showed the typical worker in the United States has to earn at least $18.79 per hour to be able to afford a nice two bedroom apartment, in addition to spending no more than 30 percent of their income.
An average renter earns about $14.32 hourly. The National Low Income Housing Coalition estimates that a family needs an annual income of $39,080 to afford a two-bedroom apartment at an average fair market value of $977. In the United States, there are more than 22 million families with annual incomes that is less than approximately $39,080, showing a significant struggle for those who would like to have a house that fits their needs.
The NLIHC recently reported what would be needed to close the gap that is lingering between the demand for affordable housing and the supply.
"We would need to add 4.5 million units affordable to ELI households," Philip Tegeler, PRRAC president said.
Additional findings of the PRRAC study showed close to half of African American families don't have enough income to afford a two-bedroom apartment at the average fair market rent. Also, only 46 percent of Hispanic families have enough income at or below the estimate income threshold.
Saving up for homeownership
If you're looking for a home that fits your financial situation but aren't sure exactly how much you'll need to save in a basic savings account or how much you'll need to be making to continue living comfortably, tips were recently given to make this tasks easier.
Experts suggests pinpointing exactly what type of home you want and determine if you are ready to buy this type of house or any other. Considering homeownership is more expensive than renting, you should make sure you're ready to pay more for utilities, taxes and insurance.
Sitting down and examining your financial situation is encouraged. You should determine how much you're able to afford, making sure you consider if you can manage to spend 25 to 30 percent of your total income on mortgage payments and utilities that you'll incur over the year.
After determining how much you can spend, you should find a good realtor who can guide you through the process of home buying. Realtors can be helpful because they've been through the process before and can give you the best and worst case scenarios that they've experienced before working with other homebuyers.