Reply #3: older article affects on lower income neighborhoods (may2004) [View All]

http://www.nhi.org/online/issues/135/bubble.html

It is widely believed that homeownership is the best way for low-income families to accumulate wealth and enter the middle class. There are reasons for questioning the wisdom of this view in general – many low-income homebuyers find that they are unable to hold onto their home due to job loss or a change in family circumstances, and are forced to sell after a short period of time. However, a bubble in the housing market across much of the country may make this a particularly bad time for low-income families to move into homeownership.

In the last eight years the country has experienced an unprecedented run-up in housing prices, as home prices nationwide have risen by 35 percent (adjusted for inflation). In the past, home prices have risen at approximately the same pace as other prices. While it is likely that the gains in home prices have been sharpest among higher end homes, there is evidence that even the price of homes owned by low-income families have been inflated by the bubble. <snip>