Household debt burden and savings will also play asignifcant role in housing choices: the average student loandebt stands at $26,600
and more than hal o workersand current retirees have less than $25,000 in savings.
Demographers and housing experts agree that those groupswill need smaller, energy-efcient, aordable rentals andownership opportunities to come, stay and prosper inConnecticut.
Renters: Hardest Hit
Connecticut has the 6th highest “housing wage” o anystate: in Connecticut, a renter must earn $23.58 an hour torent a typical 2-BR apartment without spending more than30% o his/her income on rent.
That hourly wage equatesto a salary o more than $49,000 a year, rising rom the$29,000 salary needed in 2004.
Those rising rents are consistent with the trend nationally– 55% o Realtors reported rising rents in August 2012, uprom 39% at the end o 2010
– and an increase in demand.In Connecticut, 32.6% o households rented in 2011, uprom 30% two years earlier.
For those households, the lacko supply has let 33.3% spending more than 30% on renteven though they make less than $35,000/year – only slightlymore than 50% o the state’s median income.
Those in most need – “severely burdened” householdsearning less than 50% o the median income and spendingmore than hal o that income on housing – totaled 114,891households, or 26% o the 436,538 Connecticut householdswho rent, 10 percentage points higher than in 2000.
According to data analysis rom the National Low IncomeHousing Coalition, those making less than hal the areamedian income aced a 33,705-unit shortage o aordablerental homes in 2011; when looking or rental housing unitsthat are both aordable
, the shortage growsto 82,578 rental homes. The median gross rent, according tothe Census Bureau, has risen to $1,021/month in 2011 rom$681 in 2000, a 50% increase that ar outstrips the 9%increase in median household income or renters and the22% overall increase in median household income or stateresidents during that period.
Homeowners: Some Relief
Buying a home in Connecticut became marginally moreaordable over the last year because o alling salesprices and an increase in the median household incomestatewide and in many municipalities. The Partnership orStrong Communities’
Affordability in Connecticut, 2011
report indicates that the state median household incomewas insufcient to purchase a home (with a 10% downpayment) in 88 o the state’s cities and towns, down rom112 municipalities in 2010. Similarly, the town medianhousehold income was able to qualiy or a mortgage tobuy that town’s median sales price home in 115 towns, animprovement rom 73 towns in 2010.
According to data gathered by the Warren Group, themedian sales price o a home dropped to $240,000 throughAugust o 2012 rom its 2007 peak o $295,000. Because oalling home sales prices and accelerating growth in personalincome since 2009, more state residents are theoreticallyable to qualiy or mortgages on more homes. The state’saggregated personal income has grown aster than homeprices since 2000: 47.5%
Still, tight credit anddown payment requirements may limit purchasing power,even as interest rates or mortgages remain at record lows.
2-1-1 received an average of 6,600 requests for housing assistance each month in 2012.
Housing production in Connecticut has been anemic over the last five years, but 2012 has seen a slight upturn, driven by anincrease in building permits issued in multifamily structures.Rental housing costs have increased nearly ten times faster than the income of renter households over the last decade. For homeowners,housing costs have increased twice as fast as income.