Despite price drop, houses still unaffordable for many in R.I.
9:34 AM Thu, Sep 25, 2008 | Permalink
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By Randall Edgar Housing prices have dropped in many Rhode Island communities, but rising costs for other necessities such as food and gas have made it even harder for many people to buy a house, a report released today by a group of housing advocates concludes. The 72-page "fact book" from HousingWorksRI states that a family of three with an income of $74,243 - more than $20,000 above the median household income for 2007 - can afford the median-priced single-family home in just 11 cities and towns. That list includes Central Falls, Coventry, East Providence, Johnston, North Providence, Pawtucket, Tiverton, Warwick, West Warwick, Woonsocket and Providence, excluding the East Side. The report assumes that a buyer would make a three-percent down payment, obtain an interest rate of 6.58 percent and spend no more than 30 percent of the household income on the mortgage, taxes and insurance. "After rising dramatically for nearly a decade, home prices stabilized and even fell slightly" during 2007, the report states, "but there is still a gross mismatch between housing costs and incomes in Rhode Island." 
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