DuPage homes more affordable

DuPage Foreclosure & Real Estate News

Living is becoming more affordable in DuPage County thanks to plummeting home prices.

A housing affordability index calculated by the DuPage Homeownership Association reached 65 this year, indicating that families earning the median income in DuPage County have 65 percent of the monthly income needed to afford a median-priced home.

By showing whether the typical family can afford housing in the county, the index is intended to show the balance of the housing market, said Dru Bergman, the association's executive director.

"It's just kind of a rough rule of thumb of (whether) the market is in balance," Bergman said. "What this is showing is there is still a pretty significant gap between what the typical family is earning and the typical price of a single-family home."

The index is based on the HUD standard that a family should use no more than 30 percent of its monthly income for housing costs, Bergman said. According to that rule, families in DuPage would have to earn $110,920 to afford the median-priced single family home.

The index grew by 10 points from last year as the median price of a single-family home dropped by 9 percent to land at $329,000, according to data from the Illinois Association of Realtors and the U.S. Department of Housing and Urban Development. A 1 percent rise in average wages - from $69,800 to $71,600 - also contributed to the improvement.

Before this year, the index had fallen each year since the DuPage Homeonwership Association began issuing the number in 2005. The number was set at 63 that year, but fell to 59 in 2006.

Bergman called the decreasing home prices a "double-edged sword." While lower prices mean homes are more affordable, more families are facing foreclosure.

Homeowners seeking foreclosure counseling from the DHOC more than doubled last year, Bergman said. DHOC staff counseled 133 homeowners last year, up from 54 in 2006 and 46 in 2005. So far, 122 owners have received counseling this year. West Chicago, Wheaton and Naperville were the top cities represented by homeowners.

The median sales price for single-family homes in DuPage County remains the highest in the state. The second-highest price is in Lake County, where it fell 2 percent to $299,900.

Wheaton-based DHOC offers free classes for first-time home buyers twice a month at locations throughout DuPage County, as well as foreclosure and reverse mortgage counseling to homeowners. Visit www.dhoc.org or call 630-260-2500 for details.

 

 

Affordablility Index

 

 

DuPage Homeownership Center's annual Labor Day Housing Affordability Index is 65, indicating that families earning the median income have 65 percent of the monthly income needed to afford the median-priced single-family home in the DuPage County.

Year Index

2008 65

2007 55

2006 59

2005 63

Here's how it works:

$329,000: Median sales price of a single-family home in DuPage County

$71,600: Median income

$9,870 : Downpayment (3 percent of home price - using typical first-time home buyer lending criteria)

$319,130: Loan Amount (97 percent of home price)

6.12 percent : Interest Rate - 30-year fixed-rate loan

$1,938 : Monthly principal and interest payment

$548 : Monthly real estate taxes (estimated at 2 percent of home price)

$82 : Monthly homeowners insurance premium (estimated at 0.3 percent of home price)

$205 : Monthly private mortgage insurance (estimated at 0.77 percent of loan amount)

$2,773 : Total housing payment (principal, interest, real estate taxes, homeowners insurance and private mortgage insurance premium)

46 percent : Housing payment as a percentage of median monthly income Sources: Illinois Association of Realtors Quarterly Housing Survey, U.S. Dept. of Housing & Urban Development, Illinois Association of Realtors

 

 

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