Arizona teachers ended a six-day walkout on Friday after legislators approved raises totaling 20 percent over the next four years—the equivalent of about $9,000 based on 2017 wage data from the Bureau of Labor Statistics.
This change comes at a critical time, as housing affordability for teachers is in dire straits. In 2018, 11.5 percent of all homes for sale across 28 metros are affordable on an average teacher’s salary of $62,860, down from 19.7 percent for the same metros in 2016. In Phoenix, just 0.5 percent of homes for sale are affordable, down from 1.7 percent in 2016. With the lowest average teacher salary, Phoenix ranked second-to last in our latest analysis of housing affordability for teachers, with only Denver coming in behind. Here’s the full ranking:
The approved 20 percent raises will increase the average Phoenix teacher’s maximum home-buying budget from $130,000 to $170,000 by the time they’ve been fully awarded in 2022. The wage increase will more than double the share of Phoenix homes affordable to teachers, from 0.5 percent to 1.1 percent.
“A 20-percent wage increase is a small victory in the national fight for fair compensation for teachers,” said Redfin chief economist Nela Richardson. “However, in today’s housing affordability crisis, far too many teachers still lack the opportunity to become homeowners and long-term investors in the communities they serve. We still have a long way to go before teachers and other public servants in our nation’s cities have a chance to achieve the American dream.”
Using data from the Bureau of Labor Statistics, we calculated the average salary by metropolitan area for elementary, middle and secondary teachers (except special education). Based on these average salaries, we gathered all multiple listing service (MLS) listings active on the market in each metro as of May 1st, 2018, along with the estimated property tax rates. Using the list price, current homeowners association (HOA) dues, and the property tax rate for each listing, we calculated the estimated monthly mortgage cost with a 4.5 percent interest rate and 3 percent down payment of the current list price and determined the percentage of homes where the monthly mortgage payment was equal to or less than the max monthly mortgage payment possible on the average teacher’s salary for each area based on the 30 percent gross income rule for affordability.
To download all the data for the 28-metro ranking, click here.