41 of Homes Unaffordable on Two Median Incomes

first_img Home Prices Housing Affordability Income Redfin Zillow 2014-04-06 Krista Franks Brock Share April 6, 2014 446 Views In the nation’s largest cities, a median income is not sufficient to purchase a median-priced home. In fact, even households with two median incomes cannot afford median-priced homes in the 40 largest cities in the United States, according to a Redfin survey released last week.National home prices have experienced double-digit increases for the past two years, and prices continue to rise. In contrast, inflation-adjusted median household income is nearly the same as it was about 25 years ago, according to Redfin.A median salary can afford only 10 percent of homes currently for sale in the nation’s 40 largest cities, according to Redfin. Even households with two median salaries cannot afford more than half of homes on the market today. With two median incomes, about 41 percent of homes become affordable, according to Redfin.Redfin reviewed non-distressed homes currently on Multiple Listing Services and income information from the Bureau of Labor Statistics as of 2012. Redfin considers a home “affordable” if a monthly mortgage payment is no more than 28 percent of a household’s gross monthly income.In Los Angeles; San Diego; and Santa Ana, California; just 1 percent of homes are affordable on a median salary. Households with two median incomes can afford 12 percent of homes in Los Angeles and 9 and 7 percent of homes in San Diego and Santa Ana, respectively, according to Redfin.A typical doctor’s salary can afford more than 90 percent of homes in 21 of the 40 cities Redfin observed. However, even doctors struggle to afford homes in San Francisco. Just 23 percent of homes are affordable on a doctor’s salary in San Francisco.Of the large metros observed, the city where the greatest percentage of homes is available on one median income is Philadelphia, where a median income brings 26 percent of homes into the affordable range. Two median incomes in Philadelphia bring 61 percent of homes into the affordable range.In Hartford, households with two median incomes fare even better. They can afford 78 percent of homes on the market.Redfin’s findings concur with recent data from Zillow revealing median-income earners in Southern California; the Bay Area; Portland, Oregon; Denver; and Miami cannot afford more than half of homes for sale in their market.center_img 41% of Homes Unaffordable on Two Median Incomes in Daily Dose, Data, Headlines, Newslast_img