SEATTLE, Oct. 9, 2018 /PRNewswire/ -- Housing
affordability across the country is especially tough in the
nation's urban areas, but in the country's largest metros it's
often the suburbs that are the least affordable.
A new Zillow® analysis examines the financial burden of housing
payments in urban, suburban and rural parts of the country. Finding
a home within their budget is the top concern for both renters and
home buyers, according to the 2018 Zillow Group Report on Consumer
Housing Trends, but where a home is located can affect that budget,
forcing many to accept tradeoffs.
Urban home buyers nationwide have to dedicate a larger share of
their income to monthly mortgage payments (26.5 percent) than
buyers in the suburbs or rural areas do – 20.2 percent and 13.4
percent, respectively. In urban areas of the Seattle metro, for example, buyers would need
to dedicate 40.4 percent of their income to monthly housing costs,
more than they would have to in either the suburbs (27.4 percent)
or rural areas (24.4 percent). The same hold true in less than a
third of the country's largest markets.
The suburbs are the most common destination for today's home
buyers, with 48 percent of all buyers purchasing a home in the
suburbsi. Yet suburban living is a bigger financial
burden for buyers in nearly half of the country's largest markets
(17 of the top 35 metros), compared with the costs of urban or
rural housing.
In San Diego, for example,
paying for a suburban home requires 40.9 percent of the median
household income. Mortgage payments on a rural home would take up
37.3 percent of the median income, and housing costs for an urban
home would require 35 percent of the typical income.
"Choosing where to live depends on many factors other than
strictly financial terms. The size and space of the home, and the
nearby amenities have to meet your needs, or come as close as
possible," said Zillow Director of Economic Research and Outreach,
Skylar Olsen. "How close you can
come to those ideal options is always limited by what you can
afford, and tradeoffs are almost always necessary. Finding a home
in your budget can be a stressful process, whether you're looking
to buy or rent. The difference between an urban core or more
distant suburb could make all the difference."
Across the country, renters signing a new lease typically spend
more of their income on monthly housing costs than homeowners do,
in large part due to still-low interest rates for buyers. The
difference between national affordability trends and what is
happening in the 35 largest housing markets is more pronounced for
renters.
Nationally, rental payments in an urban area require 36.8
percent of the median household income each month, well above the
commonly recommended 30 percent. Suburban rents are also slightly
above that threshold, requiring 31.8 percent of the median
household income. Rural rents nationwide are the smallest financial
burden, taking 23.9 percent of the typical income.
Urban rents in the Dallas
market take up a much larger share of income than those in suburban
or rural areas of the metro. The financial burden for urban renters
exceeds the 30 percent standard, with the typical urban rent
requiring 38.8 percent of the median income.
However, in about two-thirds of the biggest U.S. housing markets
rents are least affordable in the suburbs, where rental supply is
slow to grow. Renting a home in the suburbs of Chicago, for example, requires 30 percent of
the median income, more than what would be required in either urban
or rural parts of the metro.
Metropolitan
Area
|
% Income
Spent on
Mortgage
Payments –
Rural
|
% Income
Spent on
Mortgage
Payments –
Suburban
|
% Income
Spent on
Mortgage
Payments –
Urban
|
% Income
Spent on
Rent –
Rural
|
% Income
Spent on
Rent –
Suburban
|
% Income
Spent on
Rent –
Urban
|
United
States
|
13.4%
|
20.2%
|
26.5%
|
23.9%
|
31.8%
|
36.8%
|
New York,
NY
|
21.0%
|
27.4%
|
40.0%
|
34.8%
|
40.8%
|
36.9%
|
Los Angeles-Long
Beach-Anaheim,
CA
|
21.9%
|
46.2%
|
45.3%
|
36.0%
|
48.6%
|
48.0%
|
Chicago,
IL
|
13.4%
|
16.4%
|
15.3%
|
24.5%
|
30.0%
|
27.9%
|
Dallas-Fort
Worth, TX
|
13.6%
|
16.7%
|
26.8%
|
26.1%
|
29.2%
|
38.8%
|
Philadelphia,
PA
|
17.9%
|
18.7%
|
9.8%
|
28.0%
|
30.5%
|
20.9%
|
Houston,
TX
|
13.2%
|
14.6%
|
18.3%
|
28.3%
|
29.5%
|
29.8%
|
Washington,
DC
|
16.4%
|
19.6%
|
24.8%
|
21.1%
|
25.8%
|
29.8%
|
Miami-Fort
Lauderdale, FL
|
19.0%
|
26.1%
|
23.9%
|
37.4%
|
43.9%
|
41.3%
|
Atlanta,
GA
|
11.8%
|
15.5%
|
24.6%
|
21.7%
|
26.4%
|
35.4%
|
Boston, MA
|
20.0%
|
26.2%
|
28.8%
|
28.8%
|
33.5%
|
34.7%
|
San Francisco,
CA
|
50.9%
|
35.4%
|
44.5%
|
43.8%
|
35.1%
|
39.3%
|
Detroit,
MI
|
18.6%
|
15.7%
|
4.1%
|
25.3%
|
27.8%
|
15.3%
|
Riverside,
CA
|
13.9%
|
29.3%
|
18.8%
|
23.1%
|
38.5%
|
27.7%
|
Phoenix,
AZ
|
17.3%
|
21.4%
|
17.3%
|
23.7%
|
27.8%
|
24.6%
|
Seattle,
WA
|
24.4%
|
27.4%
|
40.4%
|
29.0%
|
31.3%
|
35.3%
|
Minneapolis-St
Paul, MN
|
15.0%
|
17.5%
|
16.9%
|
22.7%
|
26.9%
|
26.2%
|
San Diego,
CA
|
37.3%
|
40.9%
|
35.0%
|
39.9%
|
43.0%
|
39.1%
|
St. Louis,
MO
|
11.9%
|
13.0%
|
10.4%
|
20.5%
|
24.1%
|
18.9%
|
Tampa, FL
|
15.7%
|
19.5%
|
16.7%
|
27.3%
|
31.9%
|
29.5%
|
Baltimore,
MD
|
21.3%
|
17.2%
|
6.0%
|
28.3%
|
26.5%
|
18.3%
|
Denver, CO
|
27.8%
|
25.8%
|
26.7%
|
32.7%
|
32.7%
|
32.4%
|
Pittsburgh,
PA
|
12.3%
|
12.8%
|
8.7%
|
20.8%
|
22.9%
|
20.9%
|
Portland,
OR
|
24.9%
|
26.2%
|
28.2%
|
29.8%
|
31.3%
|
31.1%
|
Charlotte,
NC
|
12.0%
|
16.8%
|
31.4%
|
21.3%
|
26.5%
|
34.5%
|
Sacramento,
CA
|
32.5%
|
28.2%
|
37.1%
|
35.4%
|
33.0%
|
36.3%
|
San Antonio,
TX
|
20.9%
|
14.7%
|
11.3%
|
31.6%
|
27.9%
|
24.1%
|
Orlando,
FL
|
20.6%
|
21.1%
|
11.7%
|
31.5%
|
32.5%
|
26.2%
|
Cincinnati,
OH
|
12.5%
|
12.9%
|
9.5%
|
23.0%
|
25.2%
|
21.4%
|
Cleveland,
OH
|
16.9%
|
13.6%
|
6.3%
|
30.8%
|
27.1%
|
19.2%
|
Kansas City,
MO
|
13.0%
|
13.6%
|
7.2%
|
23.3%
|
25.9%
|
15.9%
|
Las Vegas,
NV
|
20.1%
|
24.0%
|
16.8%
|
26.9%
|
28.5%
|
25.1%
|
Columbus,
OH
|
14.6%
|
14.4%
|
11.4%
|
25.5%
|
26.8%
|
20.9%
|
Indianapolis,
IN
|
11.3%
|
12.2%
|
6.2%
|
23.4%
|
24.6%
|
15.6%
|
San Jose,
CA
|
23.2%
|
58.2%
|
53.8%
|
24.1%
|
36.6%
|
35.6%
|
Austin, TX
|
14.0%
|
18.4%
|
26.4%
|
23.9%
|
27.2%
|
31.2%
|
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
great real estate professionals. In addition, Zillow operates an
industry-leading economics and analytics bureau led by Zillow
Group'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.
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i https://www.zillow.com/report/2018/buyers/the-homes-buyers-purchase/
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SOURCE Zillow