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A new report by Trulia states that restaurant workers are the most impacted by wage gaps in the housing market, with less than of the professional 5% able to buy a home in more than half of the markets surveyed.
Overall, the study reported that occupations such as teachers, first responders, and restaurants workers struggle to afford homes. Teachers can afford fewer than half of the homes on the market in 42 of the 55 largest housing markets studied.
First responders can earn more than $100,000 in California, but in the state’s three most expensive markets—San Jose, San Francisco, and Los Angeles—those first responders can afford only 10.6%, 17.6%, and 25.2% of homes on their respective markets.
Affordability continues to be an issue across the U.S., as the list price for a for sale-home rose 19.2% in the last three years. Wages increased 6.7% over that same period of time.
According to Trulia, a worker earning the average U.S. annual salary of $38,640 would spend 46.1% of their income on home costs on an average-priced home of $285,000, which is a 6.5% increase from three years ago. Trulia states homeowners should not spend more than 30% of their income on housing costs.
Pittsburgh is among the most affordable of markets, with teachers being able to afford 64.2% of homes, first responders 63.3%, and restaurant workers 24.4%.
Memphis, Tennessee, is the most affordable market for restaurant workers, with 25.1% able to afford a home.
Other affordable markets include Cleveland; Detroit; Buffalo, New York; Rochester, New York; and Birmingham, Alabama.
The most expensive market is San Jose with an average home price of more than $1 million. First responders, teachers, and restaurant workers combined can afford less than 12% of the homes on the market.
Teachers and restaurant workers in San Jose combined can afford less than 1% of the homes on the market.
While home affordability in California may be a struggle for certain occupations, a report by First American Financial Corporation found that the market that is leading the nation for potential home buyers is California, as four cities—San Jose, Los Angeles, San Francisco, and San Diego—where among six whose Real House Price Index decreased and affordability increased.
