NEW YORK (CNNMoney.com) -- Despite the housing slump, most middle income workers still don't earn enough to buy a median-priced home in their hometowns, according to the Center for Housing Policy.

The center, an arm of the affordable housing advocacy group of the National Housing Conference (NHC), compared housing costs in 201 metro areas with the median wages in those areas for 60 major vocations, such as police, firemen and teachers.

Although home prices fell in 161 of those markets in the 12 months ending September 30, 2007, according to the study, home costs were still too high for typical working people in most markets.

In Chicago, for example, the median home sold for $262,000. Assuming that a buyer would put 10 percent down and had a spending ceiling of 28 percent of gross income for housing, they'd have to earn $85,589 to buy a home.

But registered nurses earned a median of only $63,938 in Chicago. Customer service representatives grossed a median of $39,876, office clerks $42,441, retail salespeople $23,056 and food service workers $21,786. For these people, home ownership remains far out of reach.

Home ownership in record drop

"We hear a lot about the 'information economy,' but most working families are still employed in traditional service occupations. In many metro areas, these families continue to face home prices and rents that are beyond their means, and as a result, employers have a difficult time attracting a quality workforce," said Jeffrey Lubell, executive director of the Center.

Nurses earning the profession's median wage could afford to buy a home in only 93 out of the 201 markets, according to the study. That was an improvement over 2006 when they could afford to buy in only 87 markets.

Customer reps could afford median-priced homes in 16 markets (up four from 2006) and office workers five (up three). Food prep workers and retail salespeople could not afford to buy in any market.

To be sure, if the NHC study had covered the last three months of 2007, when prices fell even more, the affordability findings would have improved.

At the same time, mortgage interest rates have declined. In July, the 30-year fixed rate averaged 6.7 percent, according to Freddie Mac. Last week, it hit 5.48 percent, slashing mortgage payments by about $160 a month on a $200,000 loan.

"All the affordability components are moving in the right direction," said Walter Molony, spokesman for the National Association of Realtors. Indeed, NAR's own affordability index climbed to 122 in December from 103.6 in July.

Richard DeKaser, chief economist for National City Corp (NCC, Fortune 500)., who compiles his own statistics on home affordability would not dispute the findings that many housing markets remain unaffordable, but he asserted that, outside of 1994 through 2004, which he called the most affordable period for home prices in decades, housing today is relatively reasonable.

In the late 1970s and early 1980s, for example, when interest rates were sky high, it was a much harder to buy a home, according to DeKaser.

But Maya Brennan, a spokeswoman for the Center, said, "A drop in prices is not going to close the gap for most workers. Prices are not dropping that much." She adds that places where they are cratering, such as California, the drops are coming off very high peaks.

Even when possible, and even when home ownership is possible, Brennan said, it is still often very difficult for workers. "People are having to stretch their wages from paycheck to paycheck, make sacrifices or move farther out [from their jobs] to afford housing."

Davenport, Iowa saw the the biggest improvement in affordability. The median home price there plummeted from $124,900 to $87,000, according to data provided by the National Association of Home Builders. House price drop was the biggest ever

Other dramatic swings occurred in Merced, Calif., where median prices dropped 26.2 percent, nearby Stockton, which dipped 23.5 percent less and,Modesto down 23.1 percent.

The study also looked at rental affordability and the picture here was more positive. Nurses can afford the rent on a median-priced, two-bedroom apartment in every metro area; customer service reps could do so in all but 41 markets and office workers could rent in nearly half the areas surveyed.

Unfortunately, neither food service workers nor retail clerks who earned median salaries could afford the median rent for a two-bedroom in any of the 201 markets surveyed.