1600 E. Roosevelt Road • Wheaton,IL 60187
P: 630-260-2500 • F: 630-260-2505
FOR IMMEDIATE RELEASE
September 2014
Contact:
Debra Olson, (630) 260-2500, ext. 2502
debra@dhoc.org
DuPage Homeownership Center Releases
Q-2 2014 Housing Affordability Index
Home Affordability drops for Lower Income DuPage County Households
For the first time in five years the gap between median household incomes and median home
prices in DuPage County has widened according to a report issued today by the DuPage Homeownership
Center, a nonprofit, HUD-certified housing counseling agency. The Center’s semi-annual Housing
Affordability Index is at 100, indicating that a family earning the median income had 100% of the
monthly income needed to afford the median-priced single-family home in the county. While 100%
affordability is, in itself, a positive number, this represents a 13% decrease in affordability for low- and
moderate-income families in DuPage County since last year. The trend toward decreasing affordability
will be important to watch going in to 2015. In 2007, at the bottom of the housing market bubble, the
index stood at 55, or 45 points lower than this year’s index.
A wide variety of factors contributed to the decrease in affordability. This includes higher home
prices, lower wages, higher FHA mortgage insurance premiums and increased mortgage rates. Median
Home Sale Prices rose 6.4% to $233,000 and Median Income decreased 4.5% to $72,400. Fortunately,
the Average 30-Year Fixed Rate stayed relatively steady, rising only slightly to 4.12%. The Federal
Reserve’s decision to keep rates low because of weaker than expected economic conditions has kept
mortgage rates in the low 4% range. Had rates increased to the forecasted 5% range, housing
affordability would have been much lower.
The Fed’s monetary policy will likely tighten in 2015, driving rates higher. The combination of
higher interest rates, higher home prices and stagnant or slow rising wages will continue to drive
affordability lower in the future.
For buyers looking to purchase a home in DuPage County, free resources are available. The
DuPage Homeownership Center offers consumer education classes for first-time home buyers and
market-readiness analysis. The center also administers the DuPage Homestead Program, a federal grant
program offering up to $14,999 for income-eligible households and offers a FINANCIAL FITNESS Program
providing financial capability training and coaching to low- and moderate-income clients.
For more information about these programs, contact the DuPage Homeownership Center at
(630) 260-2500 or visit their website at www.dhoc.org.
DuPage Homeownership Center
2014 Affordability Index: 100
2013 Affordability Index: 113
2012 Affordability Index: 97
2011 Affordability Index: 90
2010 Affordability Index: 87
2009 Affordability Index: 84
2008 Affordability Index: 65
Median Sales Price for Single-family Home in DuPage County – Q2 2014
(Source: Illinois Association of Realtors Quarterly Housing Survey)
Median Income (Source: U.S. Dept. of Housing & Urban Development)
Down Payment (3.5% of home price – using FHA lending criteria)
Loan Amount (96.5% of home price, plus FHA upfront Mortgage Insurance Premium of 1.75%of loan
amount, or $210,370 + $3681)
Interest Rate (Source: Illinois Association of Realtors – based on a composite of closing rates for 30
year fixed-rate mortgages on single-family homes as reported by Freddie Mac for the North Central
region, which includes Illinois)
Monthly Principal & Interest Payment
Monthly Real Estate Taxes (estimated at 2.0% of home price – standard “rule of thumb” in our area)
Monthly Homeowners Insurance Premium (estimated at 0.3% of home sale price)
Monthly FHA Mortgage Insurance Premium
(1.35% of base loan amount for borrowers putting less than 5% down)
Total Housing Payment
(Principal, Interest, Real Estate Taxes, Homeowners And Mortgage Insurance Premium)
Housing payment as a percentage of median monthly income
$233,000
$72,400
$8,155
$228,779.79
4.12%
$1,108.12
$388.33
$58.25
$252.95
$1,807.65
30.0%
Using the HUD standard that a household should spend no more than 30% of their monthly income on
housing, a family would need to earn $72,306.00 (FHA borrowers) to afford the payment of $1,807.65
FHA on the median-priced home. Given that the median household income in DuPage County is
currently $72,400, the “typical” family would have 100% of the income needed to afford the “typical”
home; hence the Affordability Index of 100.
The median DuPage County home price rose from $218,000 at the end of 2013 to $233,000 by mid-year
2014, and remains the highest of any county in the state. Lake County was second with a median home
price of $200,000. The benchmark interest rate increased less than expected from 3.98% to 4.12%, but
the median income fell to $72,400. [The data used to calculate the index are published by the Illinois
Association of Realtors (IAR), Freddie Mac and the U.S. Department of Housing and Urban Development
(HUD).]
Historical Data
Year
Median Sales Price
(Sales Figures,
Illinois Assoc. of Realtors)
Median Income
(U.S. Dept. of Housing
and Urban
Development)
Ave. Interest
Rate
(Freddie Mac)
DuPage
Affordability
Index
2014
$233,000 – Q2
$72,400
4.12%
100
2013
$218,000 – Year-end
$75,800
3.98%
113
2012
$267,000 – Q2
$75,800
3.65%
97
2011
$270,000 – Q2
$74,800
4.69%
90
2010
$284,900 – Q2
$75,100
4.94%
87
2009
$290,000 – Q2
$74,900
5.07%
84
2008
$329,000 – Q2
$71,600
6.12%
65