Relocating not always a good idea
By Melissa Wirkus
Housing costs
continue to soar throughout many parts
of the country, and it is getting harder
and harder for many Americans to afford
the homes they have now, or get into a
home at all.
Rising mortgage rates, declining home
values and increased consumer spending
are all factors that are contributing
to housing costs taking a bigger bite
out of each monthly paycheck.
Since housing costs have been increasingly
rising throughout most parts of the country,
many people are looking for ways to decrease
the amount of money they spend on housing
every month.
One thing that many Americans
are doing across the U.S. to decrease
their housing costs, is by moving to areas
that cost less to live in. But contrary
to what many of these people initially
thought, other costs add up instead.
An October 11, 2006 article by James R.
Hagerty of The Wall Street Journal, “Relocating
to cheaper housing may not help low wage
families,” discusses some problems
with the idea.
A recent study shows why relocating to
cheaper housing will not necessarily help
lower income families.
“Moving to an area with lower housing
costs often doesn't pay off for low-income
Americans, according to a study to be
released today by the Center for Housing
Policy, a nonprofit research group based
in Washington.”
“The study, which looks at families
with low to moderate incomes in 28 metropolitan
areas, found that transportation costs
in places with cheaper housing are often
so high that they wipe out the savings
from lower rent or mortgage
payments. Such places tend to be farther
from employers or short on public transportation,
which makes commuting costlier.”
This make s a lot of sense since cheaper
housing areas is usually on the outskirts
of where any employment centers would
be and commuting is something that is
very costly, given today’s gas prices.
The study compared the cost
of housing and transportation in San Diego
to Dallas. Housing is definitely more
expensive in San Diego, but they found
that San Diegans actually spent less on
transportation than those in Dallas.
“The median house price in San Diego,
at $613,000, is four times that of Dallas.
But the study found that working families
in San Diego spend 59% of their income
on housing and transportation, only slightly
more than the 57% they spend in Dallas.
Families in Dallas spent just 26% of their
income on housing, compared with 31% in
San Diego, but the Dallas families spent
more on transport.’
So it seems like the best bet for families
that are struggling on housing costs is
not to relocate
to somewhere cheaper, but to stay put
and increase their monthly savings.
