ABSTRACT
Community demographics are the drivers for the adjustments in size, quality and location of residential housing choices. The housing market operates largely under free-market principles, which presume that the supply of dwelling units will match the demand for such dwelling units over the long term. The housing market will reach reasonable price equilibrium between the homebuyers and home sellers. Under traditional market principles, housing affordability includes the principle and interest payments of the mortgage, local taxes, insurance, and utilities, which, in total, become the housing cost burden for the homeowner. The conventional rule of thumb is that overall housing cost burden ought not to exceed 25 percent of one’s monthly gross household income. Yet, during the housing bubble, it was beyond 30 percent. (Sowell, 2009; Holcombe and Powell, 2009) Accordingly, under conventional mortgage lending, households will then sort themselves out geographically within certain jurisdictions that will meet their respective social preferences and housing affordability. This implies a Big Sort among homeowners, causing the variation in neighborhood positional social status tied to race, housing price and family income levels (Lucy and Phillips, 2000; Bishop, 2008; Wasik, 2009; Benjamin, 2009; Katz, 2009; Briggs, et al., 2010; Ehrenhalt, 2012; Gallagher, 2013; Mayorga-Gallo, 2014).
