When it comes to the cost of living in cities, a general rule of thumb is that housing prices are much higher in the country’s economic and population hubs, especially in the cities along the coasts.
As Visual Capitalist’s Jeff Desjardins notes, particularly in recent years, prices have been pushed sky-high in places like New York City or San Francisco through a combination of limited supply of new homes, increasing demand, shifting demographics, and government regulations.
PUTTING IT INTO PERSPECTIVE
Today’s visualization from HowMuch.net applies a common denominator to compare 97 of the biggest cities in the United States. Using a measure of median household income against the average mortgage payment in each city, we get a gauge of how many hours must be worked each month just to pay down the house.
The visualization uses data from the U.S. Census for household income and Zillow for median home listing price, while calculating mortgage payments based on a standard 30-year term.
Courtesy of: Visual Capitalist
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THE RESULTS
Using the above method to compare the amount of hours it takes to pay down a monthly mortgage, we see some interesting contrasts in the country.
Here are the five most expensive cities in the United States for housing:
With about 170 hours in a normal work month, the average people in these cities are spending 50% or more of their income just to pay down their mortgages. It’s worst in New York City and Los Angeles, where at least 65% of income is going towards housing.
These cities stand in stark contrast to the five cheapest cities based on hours of work needed:
In a city like Memphis, TN it takes only 18.4 hours of work a month to pay down the average mortgage. That’s equal to only about 10% of monthly household income.
COASTAL DISPARITY
Interestingly, even though coastal hubs have high prices relative to the cities in the middle of the country, they differ quite widely against each other. This discrepancy does not necessarily show in terms of ranking, but more in terms of the actual hours of work needed.
Washington, D.C., for example, requires less than half the hours of work to pay down a mortgage than Los Angeles or New York City. Meanwhile, a popular west coast hub like Seattle only needs 72.8 hours in comparison to New York’s 113.5 hours.
Those cheapest 5 cities are full of Blacks . Wonder how that fiqures into the equation ?None dare say it but Blacks do drag down local homes prices.
I know this, I live in a very expensive area of the country. 1 mile from the CIA in Langley Virginia. I can count the blacks on 1 hand. There is a shit ton of diversity though.
Well, if I can put up with the high crime areas of the country…
Over population + NIMBYism + income/wealth inequality + technology + monopolistic business practices + offshoring +++++++ and what do you get? Another day longer and deeper in debt.
I owe my soul to the country oligarchs.
Mortgage? Huh! What is this thing they speak of??
I have 60 acres in the country. I should be able to wake up one Saturday and while having breakfast think ” I’m going to build a new housing,starting today ” without having to get “Permission” from the gooberment. I get it that perhaps they’d need to approve my septic design since that can affect others. Other than that they should have zero input !
Prices are higher because of gooberment intervention .
If this isn’t serfdom, I don’t know what is. The sad thing is that people do it willingly.
And these probably are pre-tax hours. How many hours of take-home pay are needed, especially in the big city Dem-controlled utopias?
Good question. I assume the answer to be…just add whatever percentage of tax you pay to the number of hours the chart says. So if the chart says 100 and your tax bracket is 35%, take 100 and times it by 1.35 and you’ve got 135 hours.
I have to work precisely zero hours to pay my mortgage each month but I still have to work five hours each month to rent my property from the county government………in perpetuity.
Mortgage is paid. Been there done that. It is not just the mortgage many of these cities have insanely high taxes. In the leafy suburb I live in southwest of Boston the taxes on our modest antique cape have gone from $2400 in 1990 to nearly $9000. If the government wanted affordable housing it could be done with ease. Towns, cities, states and the federal government control, enormous amounts of land. Releasing this land at a reasonable price with reasonable restrictions on the developer for profit margins and lifting many onerous and unnecessary regulations, housing could be built and sold for much less than the current market rate. Why not, because most local governments want high prices justifying higher taxes. I am in about 5 to 10 houses a week for my job and many of the young buyers I see desperately want to buy a home and there are literally no new homes available to this market in the greater Boston area.
With the toxic brew of asset inflation (ie houses), stagnant wages, exorbitant land costs, high taxes, and government regulation owning a house is quickly becoming a luxury for the middle class. If you are well off this is not an issue, if you are poor enough to qualify for section 8 or other subsidized housing, not an issue, but if you are part of the middle class, especially the lower middle class housing will eat up an enormous percentage of your income.
Many will say move, but this option is not always so easy with aging parents, ties to the community, relatives close by. I repeat if the government wanted housing that could be affordably purchased by the average middle class worker, especially first time home buyers who make up about 30% of the market, then there would be such housing.
Bob.
How blest I am for me spit o`land that taint there on the map.
For if it twer, you may rest assure. Aye, be surely givin er back.
That was great.