Millions of people spend half their earnings on housing!
MIAMI, Florida - September 23, 2008
- Al Ray is so strapped for cash, the only time he eats out is on Wednesday or
Sunday, when the local McDonald's sells
hamburgers for 49 cents.
Ray lost his engineering job last November, and has been working as high school tutor, scratching out about $1,000 a month - if he's lucky. He struggled to make his $1,400 monthly mortgage payment and $330 monthly homeowners' association fee until May, when he stopped paying.
Ray, 44, is looking for work and renting out a room in his two-bedroom condo in Davie, Fla., for $500, but his monthly income doesn't match his expenses and he's facing foreclosure.
"I barely have money to survive," he said.
Ray is one of more than 7.5 million people - almost 15 percent of American homeowners with a mortgage - who are spending half of their income or more on housing costs, according to 2007 data released Tuesday by the U.S. Census Bureau. That is up from nearly 7.1 million the year before.
Traditionally, the government and most lenders consider a homeowner spending 30 percent or more of their income on housing costs to be financially burdened. But that definition now covers almost 38 percent of American homeowners with a mortgage - 19 million of them.
Though home prices have fallen this year, in the most expensive markets where home prices tripled during the boom, many working families still cannot afford to buy a home.
Ed. Note: Five’ll get you ten that Mr. Ray’s job is now being performed in India.
