Cities With the Highest — and Lowest — Share of Income Spent on Mortgages

This story originally appeared on HireAHelper.

Housing is the largest expense for the average American household. Among homeowners with a mortgage, the median share of household income going toward mortgage payments alone — not including other household expenses such as utilities — is 14.9%, according to Census Bureau data. This figure varies substantially across the country, and many Americans spend a much larger proportion of their income on their mortgages. During economic downturns, these households are especially vulnerable.

While the majority of American homeowners put less than 20% of their income toward mortgage payments, more than 7.5 million households spend 30% or more. Furthermore, 4.5 million households — or almost 10% of all households with a mortgage — allocate over 40% of their income to mortgage payments.

This trend is tightly correlated to household income, with lower-income households more likely to spend a greater share of their income on their mortgage payment.

Among households earning less than $25,000 (accounting for 7.2% of households with a mortgage), the median share of income going toward mortgage payments is 55%. This percentage declines steadily as household income increases, with households earning over $175,000 per year spending just 9.4%.

Because of the large geographic variation in home prices and earnings, housing costs as a percentage of income vary substantially across cities and states.

Here are the metropolitan areas with the highest and lowest share of income going toward mortgage payments.

Methodology

To determine the metros with the highest and lowest share of income going toward mortgage payments, researchers at HireAHelper, a marketplace for local moving companies, analyzed the latest data from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS) and the Zillow Home Value Index.

The researchers ranked metro areas according to the median share of income spent on mortgage payments. In the event of a tie, the metro with the higher median monthly mortgage payment was ranked higher.

Researchers also included median monthly household income (for homeowners with a mortgage) and the Zillow Home Value Index for July 2020 — a measure of the typical home value in a region.

Only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, metro areas were grouped into the following cohorts based on population size:

• Small metros: 100,000–349,999
• Midsize metros: 350,000–999,999
• Large metros: 1,000,000 or more

Large metros with the highest share of income spent on mortgages

10. Portland-Vancouver-Hillsboro, OR-WA

• Median share of income spent on mortgage payments: 16.7%
• Median monthly mortgage payment: $1,500
• Median monthly household income: $8,908
• Zillow home value index: $425,758

9. Virginia Beach-Norfolk-Newport News, VA-NC

• Median share of income spent on mortgage payments: 17%
• Median monthly mortgage payment: $1,300
• Median monthly household income: $7,575
• Zillow home value index: $250,878

8. Las Vegas-Henderson-Paradise, NV

• Median share of income spent on mortgage payments: 17.3%
• Median monthly mortgage payment: $1,200
• Median monthly household income: $7,000
• Zillow home value index: $298,275

7. Seattle-Tacoma-Bellevue, WA

• Median share of income spent on mortgage payments: 17.4%
• Median monthly mortgage payment: $1,800
• Median monthly household income: $10,242
• Zillow home value index: $551,311

6. Sacramento-Roseville-Arden-Arcade, CA

• Median share of income spent on mortgage payments: 17.8%
• Median monthly mortgage payment: $1,600
• Median monthly household income: $8,842
• Zillow home value index: $439,664

5. Miami-Fort Lauderdale-West Palm Beach, FL

• Median share of income spent on mortgage payments: 18%
• Median monthly mortgage payment: $1,300
• Median monthly household income: $7,000
• Zillow home value index: $308,522

4. New York-Newark-Jersey City, NY-NJ-PA

• Median share of income spent on mortgage payments: 18%
• Median monthly mortgage payment: $2,000
• Median monthly household income: $10,668
• Zillow home value index: $491,993

3. San Diego-Carlsbad, CA

• Median share of income spent on mortgage payments: 19.2%
• Median monthly mortgage payment: $2,000
• Median monthly household income: $9,917
• Zillow home value index: $639,238

2. Riverside-San Bernardino-Ontario, CA

• Median share of income spent on mortgage payments: 19.6%
• Median monthly mortgage payment: $1,500
• Median monthly household income: $7,529
• Zillow home value index: $395,370

1. Los Angeles-Long Beach-Anaheim, CA

• Median share of income spent on mortgage payments: 19.8%
• Median monthly mortgage payment: $1,900
• Median monthly household income: $9,500
• Zillow home value index: $696,601

Large metros with the lowest share of income spent on mortgages

10. St. Louis, MO-IL

• Median share of income spent on mortgage payments: 13.2%
• Median monthly mortgage payment: $1,000
• Median monthly household income: $7,583
• Zillow home value index: $186,055

9. Louisville/Jefferson County, KY-IN

• Median share of income spent on mortgage payments: 13.2%
• Median monthly mortgage payment: $900
• Median monthly household income: $7,083
• Zillow home value index: $187,443

8. Detroit-Warren-Dearborn, MI

• Median share of income spent on mortgage payments: 13.1%
• Median monthly mortgage payment: $990
• Median monthly household income: $7,542
• Zillow home value index: $186,913

7. Cincinnati, OH-KY-IN

• Median share of income spent on mortgage payments: 12.9%
• Median monthly mortgage payment: $970
• Median monthly household income: $7,558
• Zillow home value index: $195,109

6. Grand Rapids-Wyoming, MI

• Median share of income spent on mortgage payments: 12.9%
• Median monthly mortgage payment: $930
• Median monthly household income: $7,333
• Zillow home value index: $228,389

5. Rochester, NY

• Median share of income spent on mortgage payments: 12.9%
• Median monthly mortgage payment: $900
• Median monthly household income: $7,333
• Zillow home value index: $165,251

4. Cleveland-Elyria, OH

• Median share of income spent on mortgage payments: 12.8%
• Median monthly mortgage payment: $930
• Median monthly household income: $7,189
• Zillow home value index: $166,325

3. Indianapolis-Carmel-Anderson, IN

• Median share of income spent on mortgage payments: 12.6%
• Median monthly mortgage payment: $900
• Median monthly household income: $7,167
• Zillow home value index: $191,069

2. Buffalo-Cheektowaga-Niagara Falls, NY

• Median share of income spent on mortgage payments: 12.1%
• Median monthly mortgage payment: $910
• Median monthly household income: $7,417
• Zillow home value index: $179,947

1. Pittsburgh, PA

• Median share of income spent on mortgage payments: 12%
• Median monthly mortgage payment: $900
• Median monthly household income: $7,500
• Zillow home value index: $165,002