Housing Vs. Salary Quandary

We just weathered a commited urge to purchase; two weeks of study, research and even touring of 'homes' in Colorado. Suffice to say discouragement was as much a reason for not plunging in as plans for going anywhere else. This (below) is as real as any blue-blooded truth in America today, tho you don't hear much beyond 'BUY NOW, FOR GODS SAKE!'. Lets discuss, all ye who remain....

Study: Even once-affordable cities now too pricey for many
By Jennifer C. Kerr, Associated PressAugust 9, 2005
WASHINGTON - Housing prices are far outstripping salary increases for low- and moderate-income jobs, putting the American dream of owning a home beyond the reach of teachers, firefighters and other community workers in many cities, said a study being released today. The report, by a coalition advocating affordable housing, found that even cities once considered affordable, such as Tulsa, Okla., are rapidly becoming too pricey for lower-income workers such as janitors and retail sales employees.
Six Colorado areas are listed in the study, which found the median price of a home in the United States rose 20 percent in just 18 months, to $225,000. During that time, wages for teachers, firefighters and nurses in most cities remained flat or increased slightly but still fell far short of the salary needed to buy a home, the report from the Center for Housing Policy said.
For example, the median household income for a nurse rose 10 percent between 2003 and 2005, to about $36,000. For a firefighter, wages were flat, remaining at about $37,000 a year. Those salaries don't come close to the $71,000 annual income needed to qualify to purchase a $225,000 home. The number is based on a down payment of 10 percent.
"It's not just the level of housing prices vs. wages but the fact that, especially in some areas, the housing prices are growing so much faster," said Barbara Lipman, the research director for the center. "It's creating this dynamic where people who work these jobs must feel like they'll never catch up. The dream of home ownership may be unattainable."
The study looked at incomes for more than 60 occupations including janitors to accountants. It examined housing prices for nearly 200 metropolitan areas from the fourth quarter of 2003 to the first quarter of this year.
The least affordable places were the usual suspects: San Francisco, Orange County, Calif., and Northeast cities such as New York and Boston. Some of the most affordable places were in the Midwest, such as Waterloo, Iowa; Saginaw, Mich.; and Lima and Youngstown, Ohio.
But Lipman said even cities such as Tulsa and Minneapolis, traditionally thought of as more affordable, are now a concern.
"We're seeing a problem in areas where you'd expect and then beyond that because of the flatness of the wage growth and the increased pressures on home prices and rents," she said.
State affordability
•Six Colorado metro areas are included in a study on affordable housing released today by the Center for Housing Policy:
City Median home price Income needed*
Boulder $285,000 $90,382
Colorado Springs $180,000 $57,083
Denver $220,000 $69,768
Fort Collins$216,000 $68,500
Greeley $191,000 $60,572
Pueblo $116,000 $36,787
• On the Web: Housing affordability by area and occupation, http://www.nhc.org/chp/p2p/* Annual income needed to afford to buy a median-priced home and make at least a 10 percent down payment.

Krugman weighs in http://www.nytimes.com/2005/08/12/opinion/12krugman.html?th&emc=th