NEW STUDY: Homeownership in Every Community in RI Is Functionally Unaffordable to the Average Buyer
GoLocalProv News Team
NEW STUDY: Homeownership in Every Community in RI Is Functionally Unaffordable to the Average Buyer
Housing Works RI new data shows there is not a single municipality in Rhode Island where a household earning the median homeowner income of $107,452 can affordably buy a home. Median single family home prices continue to rise, and throughout Rhode Island’s municipalities, have increased a range of 18% (Glocester) to 112% (Central Falls) since 2018.
Earlier this week, GoLocal reported, that according to September real estate data, Rhode Island home prices continue to hover just under $500,000 for the median price of a single-family home.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“It only leads me to believe that the market is going to continue, values are going to continue to appreciate going into next year. If we are still in a housing shortage, we have a drought out there,” said Ben Scungio of Mott & Chace Sotheby’s International in an interview on GoLocal LIVE.
“There's just not enough homes for people, and get ready, you know, once those interest rates start to really dramatically come down into the fives, we're going to see the prices really start to skyrocket again,” said Scungio.
According to September data, the median asking price for new listings reached $499,000, while the median home price of sold listings was $485,000.
According to the report, renters do not fare much better. Renting the average 2-bedroom apartment costs $2,107 according to RIHousing’s 2023 Rental Survey, and would require an income of more than $84,000 to affordably rent. This exceeds the state’s median renter income by nearly $40,000.
The housing wage, an estimate of the hourly wage a full-time worker must earn to afford a modest rental home at HUD’s fair market rent (FMR) without spending more than 30 percent of their income on housing costs, continues to outpace Rhode Island rents. Of the top 20 occupations considered by Rhode Island’s Department of Labor and Training within the “Fastest Growing Occupations, 2020-2030 Projections,” 92 percent (108,828) of these 119,000 jobs do not pay the National Low Income Housing Coalition’s 2024 housing wage for Rhode Island of $33.20/hour. Only two of the top 20 occupations pay enough to affordably rent an average 2-bedroom apartment, which requires an hourly wage of $40.52; and none pay enough to buy the 2023 median single family home, which requires hourly wage $69.08.
Brenda Clement, HWRI’s Executive Director, said: “While affordability challenges continue to maintain momentum, Rhode Island has taken some key steps in the General Assembly this past year to work to combat this crisis. The 2024 Housing Fact Book highlights state and federal investments including a pilot low-income tax credit program of up to $30M annually for five years, and the approval of a ballot initiative for a $120M bond up for vote this fall to increase the availability of long-term affordable homes and support community revitalization. While these are important steps in the right direction, funding from the federal State Fiscal Recovery Funds (SFRF) program continues to represent the most substantial source of funding for housing in the state. We must continue to increase efforts and do more at every level to ensure Rhode Islanders have a safe, secure, and affordable place to call home.”
Regionally, the 2024 Housing Fact Book examines twenty-year trends in the built environment and households, and found:
- The rate of growth for households outpaced population growth in all seven Census regions of the state. It was double or more in North RI, Southeast RI, South RI, and Central RI;
- Proportional shifts in the number of housing units by building type indicate a continued dominance of detached single-family housing units in five (North RI, East Providence County RI, Providence RI, Southeast RI, and South RI) of the seven regions;
- All regions experienced decreases in the proportion of renters paying less than 30 percent of their income on rent; and increases in renters paying 30-49 percent (i.e., cost burdened);
- All seven Census regions experienced proportional increases in single-person households. Six of seven regions experienced increases in two-person households (Southeast Providence County RI experienced a decrease); and
- Proportional shifts in population across ages show that all seven regions decreased in their proportion of residents aged 0-17, and 35-49, and increased in their proportion of residents aged 50-64, and 65-79. Three regions saw increases in the proportion of residents aged 80 and older.]
Other key facts: RI Getting Older
- More than a third of Rhode Island households (143,023) pay more than 30 percent of their income toward housing costs, making them housing cost burdened and leaving less money for households to spend on personal needs and in support of our local economies.
- Rhode Island’s homeownership rates for Black, Hispanic, and Asian households are 9%, 14%, and 8% lower than the US rates.
- Since the 2000 Decennial Census, the population of Rhode Island adults aged 50 and older has grown by nearly 123,000 people, and now comprises 39 percent of the state’s population compared to 29 percent in 2000.