Dive Brief:
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Americans with the lowest incomes cannot afford to buy homes in one-third of U.S. housing markets, real estate firm Zillow reported Monday.
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The ability of the poorest working families to afford even the lowest-priced homes has “worsened sharply” over the past two years, the report said.
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Zillow Chief Economist Stan Humphries called the disparity between the ability of low-earning families and those with higher household incomes “a striking example of growing income inequality in America.”
Dive Insight:
The lowest earners spend a greater proportion of their incomes on housing than others, Zillow said. That share has increased over two years, while it has remained unchanged for homeowners and tenants who earn higher wages. In Los Angeles, for example, workers in the bottom third of income levels would spend 85% of their monthly incomes on their mortgage payments if they purchased a low-priced home, so they are “effectively locked out of hot housing markets.”
Those in the middle third of incomes in Los Angeles, on the other hand, would spend 41%, and those in the top tier would pay an average of 30% of their incomes on housing.
