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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 makes 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.