Study: 20% Say Mortgages Impact Financial Goals

A recent survey by HomeTap discovered that 20% of homeowners in America report that their mortgage payments owed each month directly affect their abilities to reach any other financial ideals.

Additionally, 73% reported that they felt these same financial constraints due to housing costs at least some of the time.

The Zebra took this information and conducted its own research to uncover the most and least “house poor" cities in the nation while breaking their data discovery down region by region.

Specifically, “house poor” is classically defined as those homeowners whose expenditure on costs for housing and living expenses exceeds 30% of their gross monthly income. In laymen’s terms, the verbiage basically means that you are spending such a great amount in fees directly tied to your housing that there is simply not enough left over at the end of each month to afford much of anything else in life. Some of the most common (and costly) expenditures that can lead to such bloated housing costs include your monthly mortgage payments, homeowners insurance, as well as myriad surprise costs that can pop up at any time and really break the budget (air conditioner repairs, plumbing crises, etc).

As Zebra realized that location was a great determining factor that directly affected which homeowners were considered to be house poor, their recent report determining the most and least house poor cities by region showcases where exactly in our nation represents hot spots in housing “black holes.”

By comparing a sample of the 100 most populated U.S. cities—using a rating system based on average home price, household income, and homeownership rate—the survey found that the cities of Miami in Florida; Richmond, Virginia; and New Orleans were the most house-poor cities in the South. On the opposite end of the spectrum, the least house-poor cities in the South were determined to be El Paso, Texas; Oklahoma City; and Virginia Beach.

The Northeast region revealed that the homeowners most likely to struggle with housing costs resided in Newark, New Jersey, the nation’s largest metro of New York City, and Boston. In contrast, the cities with least house-poor homeowners in the Northeast were found to be Pittsburgh; Buffalo; and the nation’s capital of Washington D.C.

The Midwest region’s trio of most house-poor cities was Detroit; St. Paul, Minnesota; and

Milwaukee, Wisconsin. As for the least house-poor city among them, the Midwest’s metros of Indianapolis, Wichita, Kansas; and Kansas City, were found to offer resident homeowners the easiest living condition and affordable home prices.

Homeowners residing in the West were found to be experiencing the most struggle to afford a home and living costs in Oakland and Los Angeles in California, followed by the Hawaiian Islands’ capital of Honolulu. The West’s cities that showed up as being the least house-poor were Albuquerque, New Mexico; Gilbert, Arizona; and Anchorage, Alaska.

Experts always caution potential home buyers to research the cost of living and other factors in their desired city of residence well before making a purchase to ensure that all costs are within your realistic budget and your monthly payments are manageable. Hopefully, these survey results can help you to avoid the all too common conundrum of being “house rich, cash poor.”