Historic homeownership lows are even lower among educators
Are you a teacher looking to buy a home? Just move to Detroit. You may not find a job since unemployment is so high but at least you’ll have a place to live!
That’s because nearly 50 percent of all the homes listed in Detroit were affordable for teachers to live in. But for the rest of the nation, it’s nothing like that, as only one in five homes for sale is affordable on an average teacher’s salary, according to real estate brokerage firm Redfin.
Out of the 32 metro areas in the Redfin study, Detroit was the most affordable place for teachers to buy a home, while San Francisco was the worst. It only has 0.6 percent of homes that are affordable for teachers on an average salary in the area. As educators make around $71,000 a year, the maximum price of a home that they can afford is $283,000. Unfortunately, the median sale price for homes in San Francisco is more than $1 million.
“The national homeownership rate is at a historic low, which is alarming in itself, but the homeownership rate for teachers is even lower,” says Redfin chief economist Nela Richardson. “Especially for teachers just starting their careers, there is a huge affordability gap to overcome that significantly affects their ability to start building wealth early through homeownership.”
Two Pennsylvania metros are in the top 5 most affordable places for teachers: Pittsburgh hits the number 2 spot with 48 percent of affordable homes and Philadelphia is number 5 with 35 percent of affordable homes for teachers.
“Affordability remains so strong for [Pennsylvania] teachers that home prices have not changed much since 2012,” the study says. “Prices were 8.5 and 6.5 percent higher respectively in these metros compared to the same period in 2012. At the same time, teacher pay kept pace with salaries rising 5.9 percent in Pittsburgh and 15.4 percent in Philadelphia — a rare combination of slow price appreciation and positive wage growth.”
It’s a great time to buy (kind of)
Yes, we all want to buy a home. Everyone agrees it’s a great time to buy, too. But with so many other factors, it’s hard to afford one. Everyone from young, urban millennials to old Midwesterners believe we should all be buying homes, but the younger group is more hesitant to take on more debt right now, as their salaries aren’t going up at the same rate that cost of living is. Unless you’re heading to Texas.
Because of that, many Americans are turning to apartment hunting, even as rents are climbing. The theory for this being that if a young person can find a higher-paying job in a different city, they can move there without the burden of selling a home where they are now. It’s easier to apartment-hop than home-hop. Homeownership ties you down, and could tie you down to a job you don’t necessarily want to stay at.
The truth is, homes are selling, but they aren’t selling to the people who need them the most because they can’t afford them. Rather, average or above-average Americans are finding it easier to buy a home while low-income Americans are struggling to afford living. Detroit, Pittsburgh and St. Louis all pay less than the national median percentage of income on mortgages. According to the Redfin study, those three metro areas land in 1st, 2nd, and 4th, respectively, on best places for teachers to buy homes.
Article last modified on March 9, 2017. Published by Debt.com, LLC .