The average price of a home grew at more than twice the rate of household income in both Washtenaw and Livingston counties since 1990, a review of new Census data by The News shows.
The growing separation between the two figures mirrors a trend across the nation, where homeowners have faced a growing gap between their incomes and the cost of their homes.
The widening gap in all but a handful of the nation's 500 largest cities helped make the recent boom in housing prices unsustainable, analysts say. The rising prices were fueled largely by low interest rates and risky borrowing, rather than increasing incomes.
Nationally, the median household income grew by about 60 percent from 1990 to 2006, roughly matching inflation. At the same time, the median home value - the point at which half cost more and half cost less -- more than doubled, to $185,200.
The trends held in Washtenaw and Livingston counties as well.
In Washtenaw County, the median household income climbed from $36,307 in 1990 to $56,817 in 2006, Census figures show. That's a gain of 56.5 percent.
At the same time, however, the median value of an owner-occupied home rose from $96,000 in 1990 to $235,900 in 2006. That's a gain of 145.7 percent.
In Livingston County, the median household income jumped from $45,439 in 1990 to $70,629 in 2000, Census figures show. That's a gain of 55.4 percent.
At the same time, the median value of an owner-occupied home rose from $97,300 in 1990 to $233,600 in 2006, an increase of 140.1 percent.
However, both the median household income and the median value of an owner-occupied home in Livingston County dipped in 2006 as compared to 2005.
Yikes. And here's the scary part: if folks earning the median income can't keep up with the skyrocketing cost of housing, what chance do lower-income individuals have of attaining the American dream?
The analysis showed that homeowners in nearly every city are spending significantly bigger shares of their incomes on housing costs. From 1990 to 2006, the share spent on housing costs increased in all but 13 of the cities examined. Nationally, the share increased from 21 percent to nearly 25 percent for homeowners with a mortgage.
In Washtenaw County, the median mortgage was $878 in 1990. It was $1,782 in 2006. That's a gain of 103 percent. Census figures also show that in 1990, 26.3 percent of mortgages took up 25 percent or more of a household budget. By 2006, that figure had risen to 51.7 percent.
Sure, housing prices are starting to stumble now –– although, that's bad news in a completely different way –– but the point here is that these figures from the Census bureau just underscore the importance of our work towards increasing the supply of affordable housing here in Michigan.
As we argued on Tuesday, this issue is too important to our state (and our nation's) economic future to ignore. While this is sobering information, fortunately there's something we can do about it. That is, if our elected officials have the will.