Blog Posting # 822; Copyright 6 December 2024. EducateMHC
Know this! HUD-Code manufactured housing (‘MH’) is federally-regulated, performance-based, affordable –attainable, factory-built housing (a.k.a. another type of offsite construction). And land lease communities (a.k.a. manufactured home communities & ‘mobile home parks’), comprise the commercial real estate (‘CRE’) component of MH! EducateMHC is the online advocate, official historian, trade term & trend tracker, as well as information resource for both EducateMHC via (317) 881-3815; email: gfa7156@aol.com, and via www.educatemhc.com to purchase Community Management in the Manufactured Housing Industry and SWAN SONG – a history of land lease communities & official record of annual MH production totals since 1955. Also my autobiography, from SmittyAlpha6 to MHMaven, describes personal combat adventures in Vietnam as a USMC lieutenant, a 45 year entrepreneur business career in MH & community ownership, as well as freelance consulting, and authoring many nonfiction texts.
George Allen is the sole emeritus member of the Manufactured Housing Institute (‘MHI’), a founding member of MHI’s National Communities Council (‘NCC’) division, an RV/MH Hall of Fame enshrinee, MHInsider magazine’s ‘Allen Legacy’ columnist and editor at large. He’s a Vietnam combat veteran, retired lieutenant colonel of U.S. Marines, author/editor of 30 books and chapbooks on MH, communities, business management, prayer, and figures of speech.
HOUSING COST BURDENS CLIMB, STEADY OR WHAT?
According to Harvard University’s Joint Center for Housing Studies, on 3 December 2024, headlined: HOUSING COST BURDENS CLIMB TO RECORD LEVELS (AGAIN) IN 2023. Now, that’s a full year ago, not today! The Press Release goes on to announce that: “Housing affordability worsened again last year, as a record number of US households were cost burdened. According to our tabulations of the newly released 2023 American Community Survey data, an all-time high 42.9 million households were cost burdened, meaning they spent more than 30 percent of their income on housing costs.”
“Additionally, 21.5 million households were severely cost burdened, devoting more than 50 percent of their income to housing, marking another all-time high.”
And this: “Median monthly costs for homeowners increased 6 percent in 2023 to $1,327.00.”
Well, as disturbing as this information is, it does raise questions that go unanswered in the seven pages Press Release.
First off; what’s that ’30 percent’ all about? Well, it’s the commonly accepted and used Housing Expense Factor (‘HEF’) or standard. For more info see *1 below.
Second; just what are the ‘monthly costs of homeowners’? This report does not say! And looking online isn’t much help either. In 2008, when EducateMHC created the ‘Ah Ha! & Uh Oh! Worksheet’ for estimating homebuyer’s reasonable ability to purchase ‘affordable’ & ‘risky’ new & resale homes of any type on realty owned fee simple or leased, we offered this bifurcated description of what’s included in the 30% annual Household Expense Factor or HEF. See *1.
Now here’s just an example of how skewed such ‘official studies’ can be at times. A middle-aged homeowner in the upper Midwest has lived in his home for 50 years and paid off his mortgage long ago. Today his monthly household expenses total $892, fully $439 less than the $1,327 featured in this report.*2
Or, looking at these figures from the Press Release perspective, this homeowner could pay a mortgage (i.e. principal & interest) not exceeding $439/month to remain below the referenced 30% HEF. Any monthly mortgage payment above that amount would put this homeowner into the 42.9 percent of Americans who’re ‘cost burdened’.
If you’re interested in obtaining the above-reference ‘Ah Ha! & Uh Oh! Worksheet’ for your own purposes, purchase a copy of SWAN SONG from wwww.educatemhc.com It’s located on pages 44 & 45, Appendix H. of the popular text.
End Notes.
- 30% annual Household Expense Factor (‘HEF’) is either ‘loaded’ with loan principal, interest, taxes & insurance (i.e. PITI) and household utility expenses, not including telephone charges; or is ‘barebones’, allowing only for PI or PITI. The ‘loaded perspective ensures ‘affordability’, as household expenses are included in monthly payments, whereas ‘barebones’ perspective is ‘risky’, since household expenses still must be paid, but now in addition to monthly amount set aside for PITI.
- What comprises this $892 figure? Monthly natural gas @ $118, electric @ $110, sewer @ $55, water @ $60, insurance @ $340 (household & vehicle), and property taxes @ $206.
‘Whole U.S. Housing Story’ in next blog posting
That’s right, the ‘Whole U.S. Housing Story’ relative to HUD-Code housing production for October 2024, and Stock Market Report for December 2024, is being compiled at this time.
George Allen