{"id":18676,"date":"2014-04-03T22:24:54","date_gmt":"2014-04-04T05:24:54","guid":{"rendered":"https:\/\/redfindevelop.wpengine.com\/blog\/research\/?p=18676"},"modified":"2020-10-06T12:58:41","modified_gmt":"2020-10-06T19:58:41","slug":"middle-class-income-housing-affordability","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/middle-class-income-housing-affordability\/","title":{"rendered":"Two Middle-Class Incomes Don\u2019t Add Up To a Home"},"content":{"rendered":"

A family with two middle-class incomes can\u2019t afford a median-priced home in most of the largest U.S. cities, according to a Redfin analysis of affordability based on list prices and median incomes. Home prices, which have seen two straight years of 13 percent increases<\/a>, are rising again this spring. Meanwhile, median household income, when adjusted for inflation, is almost unchanged from 25 years ago. At the intersection of this stagnant wage growth and housing market rebound is the middle-class homebuyer, who also has few homes to choose from thanks to a five-year low in inventory. From a first-year elementary school teacher<\/a> to a tenured college professor, homebuyers are finding few affordable homes for sale.<\/p>\n

Based on non-distressed homes listed on the Multiple Listing Service (MLS) as of March 30, 2014, and 2012 salary data from the Bureau of Labor Statistics (BLS), just 41 percent of homes currently for sale across 40 U.S. cities are affordable for a family earning two median incomes. An affordable home is one for which the monthly payment is 28 percent or less of gross monthly income.<\/p>\n\n\n\n\n\n\n\n\n
Percentage of Affordable Homes Across 40 Cities for Select Salaries and Occupations<\/th>\n<\/tr>\n
One median salary<\/td>\n10%<\/td>\n<\/tr>\n
Two median salaries<\/td>\n41%<\/td>\n<\/tr>\n
One professor salary<\/td>\n50%<\/td>\n<\/tr>\n
One engineer salary<\/td>\n57%<\/td>\n<\/tr>\n
One management salary<\/td>\n70%<\/td>\n<\/tr>\n
One doctor salary<\/td>\n86%<\/td>\n<\/tr>\n<\/table>\n
 <\/div>\n

Home Purchase Affordability By City and Occupation<\/h2>\n

The chart below breaks down affordability across most of the largest cities in the U.S. We\u2019ve indicated the percentage of homes currently on the market that are affordable for each city and occupation, based on BLS salary information. Blue means there are more affordable homes, while red means there are fewer. Not surprisingly, a doctor\u2019s salary can afford most homes in most cities, while one median salary can afford very few homes in any city.<\/p>\n

\"CityAffordabilityVisualization\"<\/a>Interpreting the Chart: A Look at Professors in Two Cities<\/b>
\nHere\u2019s a breakdown of the chart, using one job \u2014 professor \u2014 to highlight the differences in affordability by geography. A professor with the median $76,000 salary in Richmond, Virginia, can afford 88 percent of homes currently for sale. The city, which is home to Virginia Commonwealth University and University of Richmond, has a median home price of $219,000. On the other end of the spectrum, San Jose professors, with a median salary of $70,000, will find just 3 percent of homes are affordable. In the San Jose area, with universities such as San Jose State and Stanford, the median home price is $799,000.\n<\/div>\n

Places and Professions with Affordability<\/h2>\n

While the overall picture is not great for housing affordability, there are exceptions. More affordable places are scattered throughout the country, although generally not on the coasts. Two middle-class incomes can afford a decent share of homes in Hartford (78%), Richmond (71%), Philadelphia<\/a> (61%), Atlanta<\/a> (59%), Minneapolis<\/a> (56%) and Raleigh<\/a> (55%). Affordability for specific occupations include:<\/p>\n