Even Lower-Tier Homes Are Still Too Expensive For Many Workers

As rents are rising faster than ever, they are also eating more of people’s incomes. People want to buy homes, but this route isn’t possible for many of the lower-income class.

 The incomes aren’t matching the rise in home prices. Since 2000, incomes for the lowest third of U.S. workers have grown juts 15%, while home values has grown 41%.

 Renters are spending around 31% of their monthly income on rent, and homeowners are spending about 15% for mortgage payments. Obviously the situation is different geographically, as well as the household income. For example, in Los Angeles, a bottom tier worker will spend around 85% of their monthly income on a lower-priced home. Middle-income workers will spend 41% for a middle priced home, and the top will pay just 30% for the most expensive homes.

 Los Angeles, Santa Barbara, Salinas, and San Jose all are in California and the top third of workers pay just 30% or more of their monthly incomes for mortgages on expensive homes. Mid-level earners pay a little more than 30% of their incomes for middle-valued homes in 11 markets.

 The lowest third of earners pay more than 30% of their monthly incomes on low-priced homes in 77 markets! Because of this statistic, we see that many cannot afford this and are priced out of the market.

 

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