We took the current value of all homes (as of April 2019) in the largest 50 metro areas and calculated the share affordable in each ZIP code to a would-be buyer that earns the local median income. Homes were considered affordable if 30% or less of the metro’s median monthly income was required to afford a mortgage payment and other expenses, including property taxes, on that home.
In order to find the share of affordable homes on the market, we calculated the maximum amount that the median income could allocate towards a mortgage payment. We evaluated the value of each home, subtracted a 20% down payment and calculated the monthly mortgage payment using the prevailing 30-year fixed mortgage rate (according to Freddie Mac’s Primary Mortgage Market Survey). We also factored in mortgage insurance and property taxes. Based on these calculations, we determined the share of homes that were affordable without exceeding 30% of the median monthly income for that metro. Median household income is based on the U.S. Census’ 2017 1-Year American Community Survey.
1 Lori, 2014, “This secret little spot in Columbus was built in the 60’s. I see lot’s of 50 to 70 year olds walking, holding hands and they wave to me. Very few children live here, so it’s nice and quite 🙂 People seem to take pride in their yards.”
2 Camisha_welch, 2018, “I have lived here for two years now and i love it. People are friendly and really look out for each other.”