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HOUSING AFFORDABILITY <br />Housing Costs as Percentage of Household Income <br />Housing costs are generally considered affordable at 30% of a households adjusted gross in- <br />come. Table HA-4 on the following page illustrates key housing metrics based on housing costs <br />and household incomes in Ramsey. The table estimates the percentage of Ramsey household- <br />ers that can afford rental and for -sale housing based on a 30% allocation of income to housing. <br />Housing costs are based on the Ramsey average. <br />The housing affordability calculations assume the following: <br />For -Sale Housing <br />■ 10% down payment with good credit score <br />■ Closing costs rolled into mortgage <br />■ 30-year mortgage at 4.000% interest rate <br />■ Private mortgage insurance (equity of less than 20%) <br />■ Homeowners insurance for single-family homes and association dues for townhomes <br />■ Owner household income per 2017 ACS <br />Rental Housing <br />■ Background check on tenant to ensure credit history <br />■ 30% allocation of income <br />■ Renter household income per 2017 ACS <br />• The median income of all Ramsey households in 2019 was about $92,484. However, the <br />median income varies by tenure. According to the 2017 American Community Survey, the <br />median income of a homeowner is $98,835 compared to $64,050 for renters. <br />• Approximately 83% of all households and 86% of owner households could afford to pur- <br />chase an entry-level home in Ramsey ($200,000). When adjusting for move -up buyers <br />($300,000) about 66% of all households and 72% of owner households would income qual- <br />ify. <br />• Roughly 86% of all households and 88% of owner households could afford to purchase an <br />entry-level townhome/condo in Ramsey ($175,000). When adjusting for move -up buyers <br />($250,000) about 74% of all households and 79% of owner households would income qual- <br />ify. <br />• About 74% of existing renter households can afford to rent a one -bedroom unit in Ramsey <br />($1215/month). The percentage of renter income -qualified households decreases to 29% <br />that can afford an existing three -bedroom unit ($1,875/month). After adjusting for new <br />construction rental housing, the percentage of renters that are income -qualified decreases <br />slightly. About 73% of renters can afford a new market rate one -bedroom unit while 23% <br />can afford a new three -bedroom unit. <br />MAXFIELD RESEARCH AND CONSULTING 67 <br />