Housing costs for homeowners and renters are increasing at a rate substantially more than incomes are rising. If the current trend continues, we might revert back to cave homes as the next evolutionary step in housing.

Mortgage payments are just one element of rising costs, although they are the largest. A variety of other expenses also are rising, impacting all homeowners and renters. These rising costs affect new and longtime homeowners, households with and without mortgages, and renters.

Over the past decade, all major categories of household expenses have increased faster than incomes, according to a study and report by the Center for Housing Policy, the research affiliate of the National Housing Conference. Average mortgage payments increased by 46 percent; utilities by 43 percent; property taxes by 66 percent; and property insurance by 83 percent.

Rents also increased faster than incomes, rising by 51 percent. At the same time, renter incomes increased by only about 31 percent. The study found that there were particularly large increases in the costs of heating oil, natural gas and gasoline since 2006. This further stretched families' budgets.

"By documenting the substantial increases in a wide variety of housing expenses, this study shows that the nation's housing concerns extend beyond higher mortgage payments," said John McIlwain, chairman of the Center for Housing Policy. "To get the American economy back on its feet, we need to look at helping people afford the full 'costs of place,' which include the costs of shelter, utilities and transportation."

For the purpose of the study, housing expenses included rent or mortgage payments, as well as the costs of utilities, property taxes, insurance and maintenance. Those annual expenses increased by an average of $5,314, or 65 percent, over the past decade — much more than other expenses, such as food and health care. Median incomes rose by about 36 percent during that period.

A growing share of total household income for most homeowners is devoted, of course, to monthly principal and interest payments. It's the largest housing expense for homeowners with mortgages, consuming more than one-fifth of owners' incomes. Those increasing mortgage payments, along with other owner costs, directly relate to rising rents.

Perhaps a new MLS listing category for "available caves" isn't too far down the road after all.

Q: Are there any bright spots in today's housing market?

A: Despite our serious economic problems, there are signs of improvement in the housing market, according to a report from Housing Predictor, a real estate research firm.

The positive indicators should become apparent in the majority of housing markets in 2009. Some local housing markets now are approaching their bottom from an economic point of view and soon will see an upward trend in home sales.

Also, the study found that buying habits of many consumers remain relatively strong despite the fact that many have tightened their spending habits because of the high costs of gasoline and groceries. But the nation's consumer spending, comprising 70 percent of the economy, remains relatively strong, the report stated.

Home sales in several markets already are beginning to improve from previous lows, including markets in California, Florida and Michigan — three states that have been hit hardest. The increased sales are attributed to lower home prices and price cuts by lenders selling foreclosed properties, according to the report.

Q: Are counseling services really valuable for consumers?

A: Yes, when the consumer is matched with a truly competent and unbiased counselor.

The value of counseling programs for first-time homebuyers and owners who are struggling to meet their mortgage payments was underscored by a new housing counseling grant offered by the Department of Housing and Urban Development. The funds will be used to help families prepare for homeownership and remain in their homes after their purchases.

With the use of these grants, HUD-approved counseling agencies can provide not only homeownership counseling but also financial literacy training for renters and homeless individuals and families.

"These critical counseling grants not only help to put people into a home but they help to keep them there," said a HUD spokesman. "Housing counseling organizations will continue to help families make more informed choices before they purchase a home and counsel families facing foreclosure.

"Now, more than ever, it is critical that Americans better understand how to manage their money, navigate the homebuying process, and secure their financial future."

About $4 million of the grants will be used for counselors to assist senior homeowners who are considering purchasing reverse mortgages, or Home Equity Conversion Mortgages, backed by HUD. The services of a knowledgeable, unbiased counselor are needed urgently in this area.

To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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