SEATTLE, March 5, 2019 /PRNewswire/ -- Amid worsening
affordability in the U.S., people in the Washington, D.C., metro area have the most
money left over after they pay their mortgage, according to a new
Zillow® analysisi.
Assuming the median annual gross income and mortgage payment,
homeowners in Washington, D.C.,
have almost $7,000 of their monthly
income remaining after paying for their house, the most out of the
35 largest housing markets. The typical renter in Washington, D.C., has nearly $6,500 left over from their salary after their
monthly rent payment, second only to San
Jose at more than $6,800.
Residents of Los Angeles and
Florida feel the pinch the most.
Los Angeles homeowners have the
least left over ($3,450) after paying
their mortgage each month, followed by Miami, Tampa
and Orlando. Renters in the three
major Florida metros have the
smallest pools of remaining spending money after they pay rent,
with Los Angeles following just
behind.
The outlook is even bleaker for those in Los Angeles when California's substantial income tax rates are
considered. On top of housing costs, these taxes cut further into
the income left over for variable cost-of-living expenses like
transportation, child care and education.
"In our quest for happiness, or at least satisfaction, we must
accept tradeoffs. A good-paying job with career growth potential
often comes with expensive housing, leaving less for life's other
essentials such as taxes, child care, transportation, medical
services, food and leisure," said Skylar
Olsen, Zillow Director of Economic Research. "Finding that
balance where housing costs leave a comfortable amount of spending
money is tricky, especially when the prices of life's non-housing
essentials also vary widely by market."
Overall affordability for home buyers worsened last year due to
rising mortgage rates and continued strong home value appreciation
throughout most of 2018. At its November peak, the average 30-year
fixed rate in the U.S. had increased to 4.94 percent from 3.95
percent at the beginning of the yearii. However,
mortgage rates have reversed course in recent weeks and dipped
below 4.4 percent as future guidance has softened, while home value
appreciation in the nation's biggest markets is cooling rapidly – a
signal that mortgage affordability could improve in the coming
months.
A mortgage payment on the typical home in the U.S. required 17.5
percent of the median income in Q4 2018. This is up from 15.4
percent in the last quarter of 2017 but still below the historic
average of 21 percent from the late 1980s and 1990s. Using this
traditional measure of housing affordability, less expensive
Midwest markets such as Pittsburgh, St.
Louis and Cincinnati top
the list.
The typical U.S. renter spent 27.7 percent of their income on
rent payments in 2018. This is down slightly from 28.1 percent in
2017, but higher than the historic average of 25.8 percent. Rent
payments accounted for more than 30 percent of the median income in
13 large U.S. metros, widely considered the standard for
unaffordable housing costs.
Metropolitan
Area
|
Leftover
Income
After Paying
Mortgage
(Annual)
|
Leftover
Income After
Paying Rent
(Annual)
|
% Income Spent
on Mortgage
Payments
|
% Income
Spent on Rent
|
United
States
|
$52,231
|
$45,781
|
17.5%
|
27.7%
|
New York,
NY
|
$57,749
|
$50,474
|
27.2%
|
36.4%
|
Los Angeles-Long
Beach-
Anaheim, CA
|
$41,426
|
$39,926
|
43.7%
|
45.7%
|
Chicago,
IL
|
$60,395
|
$51,417
|
15.5%
|
28.1%
|
Dallas-Fort Worth,
TX
|
$58,484
|
$50,849
|
16.9%
|
27.7%
|
Philadelphia,
PA
|
$60,116
|
$52,461
|
16.0%
|
26.7%
|
Houston,
TX
|
$55,963
|
$47,200
|
15.3%
|
28.6%
|
Washington,
DC
|
$83,642
|
$77,738
|
19.3%
|
25.0%
|
Miami-Fort
Lauderdale, FL
|
$42,533
|
$33,783
|
24.7%
|
40.2%
|
Atlanta,
GA
|
$57,289
|
$50,886
|
15.7%
|
25.2%
|
Boston, MA
|
$67,165
|
$61,467
|
25.4%
|
31.8%
|
San Francisco,
CA
|
$60,039
|
$66,423
|
44.2%
|
38.3%
|
Detroit,
MI
|
$53,114
|
$46,379
|
12.9%
|
24.0%
|
Riverside,
CA
|
$47,244
|
$41,899
|
27.7%
|
35.8%
|
Phoenix,
AZ
|
$51,643
|
$47,725
|
20.1%
|
26.2%
|
Seattle,
WA
|
$61,931
|
$59,523
|
28.1%
|
30.9%
|
Minneapolis-St Paul,
MN
|
$66,794
|
$59,810
|
16.5%
|
25.2%
|
San Diego,
CA
|
$51,259
|
$49,293
|
36.4%
|
38.8%
|
St. Louis,
MO
|
$56,030
|
$50,475
|
12.8%
|
21.5%
|
Tampa, FL
|
$43,549
|
$37,072
|
19.5%
|
31.4%
|
Baltimore,
MD
|
$66,463
|
$58,730
|
16.6%
|
26.3%
|
Denver, CO
|
$60,569
|
$55,445
|
24.8%
|
31.1%
|
Pittsburgh,
PA
|
$54,214
|
$48,172
|
11.6%
|
21.4%
|
Portland,
OR
|
$56,286
|
$53,567
|
25.8%
|
29.4%
|
Charlotte,
NC
|
$53,545
|
$47,810
|
15.9%
|
24.9%
|
Sacramento,
CA
|
$50,872
|
$48,370
|
28.3%
|
31.9%
|
San Antonio,
TX
|
$49,100
|
$42,372
|
16.2%
|
27.7%
|
Orlando,
FL
|
$45,543
|
$39,225
|
20.3%
|
31.4%
|
Cincinnati,
OH
|
$56,022
|
$48,762
|
12.9%
|
24.2%
|
Cleveland,
OH
|
$47,058
|
$40,379
|
13.2%
|
25.5%
|
Kansas City,
MO
|
$56,475
|
$50,462
|
14.3%
|
23.4%
|
Las Vegas,
NV
|
$46,338
|
$43,788
|
22.9%
|
27.1%
|
Columbus,
OH
|
$57,453
|
$50,568
|
14.0%
|
24.3%
|
Indianapolis,
IN
|
$53,919
|
$47,300
|
13.0%
|
23.7%
|
San Jose,
CA
|
$62,335
|
$81,880
|
49.9%
|
34.1%
|
Austin, TX
|
$61,660
|
$56,491
|
19.7%
|
26.5%
|
Zillow
Zillow is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Launched in 2006, Zillow
is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
i For this analysis, Zillow subtracted the median
mortgage or rent payment from the median income in a given
metro
ii
https://fred.stlouisfed.org/series/MORTGAGE30US
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content:http://www.prnewswire.com/news-releases/after-mortgage-payment-washington-dc-residents-have-greatest-remaining-income-300806532.html
SOURCE Zillow, Inc.