RESOURCES:
Habitat for Humanity of Huron Valley (H4H)
TRANSCRIPTION:
Caroline MacGregor: Today, we are going to be talking about the American dream of home ownership, which seems to be something that is more and more difficult to attain for many people. Many potential buyers simply just cannot afford to purchase a home. The average 30-year mortgage rate is over 6%. And for people who bite the bullet on a home loan, other costs are also something to consider, including property taxes and insurance to repair costs. I'm Caroline MacGregor, and with me today is Sarah Stanton. She is the CEO of Habitat for Humanity of Huron Valley. Thank you for joining us today, Sarah!
Sarah Stanton: Oh, thank you! It's my pleasure!
Caroline MacGregor: We do seem to be in very difficult times with inflation creeping up, tariffs, costs are high, gas costs are high. People that used to depend on, or at least hope to be able to depend on, building equity through a home purchase. But this is almost just out reach for many people today, isn't it?
Sarah Stanton: It really is! And it's just become a much worse challenge, especially in Washtenaw County. I mean, Habitat's focused on helping low-income homeowners purchase a home, so that they can join that kind of ladder-to-build equity in their home. But now, it's almost impossible for many, many, many people to buy a home. The cost of rent has skyrocketed, so people are paying so much, such a high portion of their income in rent. Of course, the market rates for buying a home have gone really high. And so, the housing costs are up, and the interest rates are high--relatively high. And then, as you said, the cost of living in general is high right now. So, it's really difficult for people to save up the money in order to buy a home. It's more risky than it's ever been, even though it still continues to be the way to build equity for your family. And it's such a great thing to own a home and have a stable, secure place to go home to and for your kids to establish roots for their schools and that sort of thing. It's still the American dream, but it's really unattainable for so many.
Caroline MacGregor: One of the things you just mentioned, rent being so high, this is an area that's very difficult to escape for many. People just don't have the option. They've no control over this area of their life, and it seems like landlords are willing to gouge more and more, so it's this vicious cycle. How do you see us ever getting out of this or what would you advise people who are trying desperately to save toward a home?
Sarah Stanton: Honestly, it's a very difficult problem. I mean, as a community, we need to together prioritize building more affordable housing for rent and for homeownership. I mean, there's just a lack of supply, absolute lack of supply, in the lower ranges. And if you look around, there's tons of housing being built, but it's at the higher range, $500,000 and up. And I don't know the exact stats, but it is very hard to find housing that's sort of $200,000 to buy a home. There's just nothing like that out there, and there needs to be more emphasis on retaining the houses that are here and building units, either rental or home ownership, that people can purchase or rent at an affordable level. It is a really big challenge.
Caroline MacGregor: And I know when you were on our show last year, and we talked about the fact that a lot of people are paying 50% of their income toward rent, so there's hardly anything leftover for bills, for car payments, emergencies. At Habitat for Humanity of Huron Valley, what is the situation currently with the number of people that you are seeing applying to be considered for a home?
Sarah Stanton: Well, it's kind of ever-changing. Often, what we see are people that would really like to purchase a home but don't have the income to support a mortgage. And the homes we sell houses at market rates, so it's based on the marketplace, what a house appraises for. And then, people come in and buy it, and they have to have enough income to be able to afford the monthly mortgage. I mean, we try to keep the price as low as possible, and we also help people identify down payment assistance and ways to help them get that mortgage payment down. And we also have some really great bank partnerships, so we have below market interest rates for buyers. But it's still very difficult to find people that have the income to be able to purchase a house that's $200 or $250,000, let alone $500,000. You know, what's considered affordable across the country is paying 30% of your income for your housing costs. And when people start to pay, as you said, 50% of their income, there's no way to save for that down payment assistance. So, that's one of the tools that Habitat has is we try to help access either funding that we've raised or funding that's available through various sources to help people access that funding and use it to buy their home. The other thing that we have done in the last 10 years, really, is put a much bigger emphasis on trying to keep people housed. So, there's a lot of people that are growing older living in their homes trying to stay in their homes. You know, they've paid it down, but there's still a cost to keeping your home, in terms of repairs and roofs and furnaces. And so, we've put a large focus on helping people retain that home ownership, so that those homes don't just go out. Often, what can happen is corporate developers will come in and buy up homes and then rent them without putting a lot of improvements in them. And people are just kind of at the whim. They can't turn that money down because they can't afford to replace their roof or their furnace. So, they get bought out, but then, there's no good place for them to live as they grow older. So, it's a bit of a trap. And so, we're trying to affect that by doing repairs that are really critical repairs for the elderly.
Caroline MacGregor: Do you think the housing market is cooling slightly right now because of people struggling in the high prices? I've heard from some sources that homes in Michigan on the market a bit longer.
Sarah Stanton: You know, I've heard a bit about that. I can't say I know the latest stats, but I have children in their twenties, and I think there are a lot of people graduating from college and others that would like to purchase homes and are just not able to achieve that until they're in their thirties or so. And I think that's maybe slowing the market down a little bit. People are seeing it's just not the right time to try to get into the market. And there's just really such a low supply in that $350,000 and under marketplace for Washtenaw County at least. But I don't know what the trends are showing exactly.
Caroline MacGregor: Okay, yeah. I had read something from Forbes that said existing home sales declined by 3.6% from February to March of this year. It's very tough to be approved for a mortgage if you've got any debt. Isn't that correct?
Sarah Stanton: Yeah. Well, that is true. And there's debt to income ratios that are looked at carefully, of course, along with the credit score. And so, that's a challenge, especially for people on the low to mid-end of the income spectrum. Their income isn't rising at the same rate as the cost of housing is rising, so they can't keep up their buying power is just flat. And then, the cost of housing as going up, up, up. And so, it's harder and harder for people to get into the marketplace.
Caroline MacGregor: Anything new that you'd like to share as far as helping more people find that opportunity to be a part of the American dream and own a home.
Sarah Stanton: Yeah. As I said, a big part of our emphasis is on retaining homeownership, and we're particularly focused on three neighborhoods that we're partnering in in Ypsi Township because there's the highest need there. And there was also the highest risk for those homes to lose homeownership and tilt more toward rental. That's Sugarbrook, Gault Village and West Willow. And in those three neighborhoods, we're really doing a lot of work to work with existing homeowners who are often low-income, long-time homeowners that are elderly. That tends to be who needs our help, and we work with them to try to figure out ways that they can continue to afford their home and stay in it primarily looking at critical repairs that are needed. But also, looking at there's predatory practices out there and there are ways to improve community building that we work to try to largely get people involved with each other and checking on each other. And we've lately just launched this new program called "Rock the Block." And we had our first one in May, we have another one coming up June 12th, where we will go out and work on exterior projects. We brought a hundred volunteers out on the day, and we worked with 12 different homeowners to do exterior repairs that just become overwhelming as you get older in your home. Bushes grow way up over your windows. You need to put in gutter guards. There's front steps start to crumble or need handrails. There are just lots of things, and with many hands, we can get a lot of things done and really improve people's health and wellness and enjoyment of their own yard and community if we can get in there and help them do some of that hard work. So, that's a new thing that we've just started this Rock the Block program, which is fun.
Caroline MacGregor: Of course, going along with owning a home come all those repairs, and that can be extremely expensive for you.
Sarah Stanton: It can be. It can be. I know, for myself, you get worried. People show up, and you're not sure if that's who you called. Is the plumber reliable? Are they going to stay and do the work after you've given them the money? There's a lot of concern for people. And so, that's part of what we do too, is really work closely with contractors that we feel comfortable with and introduce them into the household with the homeowner and try to make it a smoother process for people, so it's not so scary to keep your home up.
Caroline MacGregor: Given that we're talking about one of the most important things in somebody's life as far as stability, what are some of the ways the community can help other people get on their feet and find a home to live in?
Sarah Stanton: That's a great question! I think we're all looking at that right now. It feels like there's so many things that are going on that feel negative, and you don't want to hear about the news. And one way to sort of combat that is to be out in your own community, getting to know your own neighbors, checking on people. But additionally, of course, Habitat is a great way to engage through volunteering and coming out and being a part of some of these work days or bringing people from your corporation or from your church or your neighbors or your friends, coming out and working alongside others in a community. It's fun and it's rewarding and it feels like you're doing something positive. It helps yourself as much as everybody else because you're just feeling good about being involved and helping others. It's a pretty great experience! And so that's a way we like to encourage people to come out, and you can see information on our website at www.h4h.org.
Caroline MacGregor: All right! I've been speaking with Sarah Stanton. She's the CEO of Habitat for Humanity of Huron Valley. Thank you for joining us today!
Sarah Stanton: It's my pleasure!
Caroline MacGregor: This is 89.1 WEMU, Ypsilanti.
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