An analysis of wages across U.S. metropolitan areas illustrates that the five most frequently available jobs in the sector doing the most hiring in the first quarter of this year are generally not paying sufficient wages to cover the cost of housing.
The five high-growth occupations included in Paycheck to Paycheck, an interactive online database and report produced by the Center for Housing Policy, are accounting, grounds maintenance, janitorial work, office work and security.
An evaluation of fair market rents revealed that rents, on the whole, have remained stable. Most rent increases have been moderate (1.1%) over the past year. Yet renters face more narrow housing choices in the market as incomes continue to stagnate. Income growth among renters remains insufficient to cover rental costs in many parts of the country.
Janitors face the highest level of difficulty when purchasing or renting homes across most housing markets. A two-bedroom rental remains unaffordable to a janitor in all of the metropolitan areas, and the rent for a typical one-bedroom unit is only affordable in approximately a quarter of the 209 metropolitan area markets studied.
Between 2010 and 2011, purchasing a home became more affordable due to lower mortgage interest rates and falling median home prices across most metropolitan areas. The income needed to purchase a median-priced home decreased by at least 3% in nearly two-thirds (58%) of all metro areas. In a smaller subset of metro areas (16%), the income needed to purchase a median-priced home increased by 3% or more. According to the study, janitors can only afford to purchase a home in 5% of the 209 markets. Buying a home still remains difficult for many low to moderate income earners due to tighter credit and down payment requirements.
Only one of the occupations in the report, accounting, offers workers compensation adequate to rent or purchase market-priced housing units in most metropolitan areas. Earning on average between $44,000 and $63,000 a year, accountants are able to afford two bedroom rents in 196 metro areas, and median priced homes are affordable in 149 metro areas. Yet, homeownership remains unaffordable for accountants in sixty metro areas including parts of the East Coast and in California.
Paycheck to Paycheck uses wage data from February 2011 and data on sector hiring frequency from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey covering the first quarter of 2011. Housing price data, from the first quarter of 2010 and 2011, are drawn from the National Association of Home Builders and assume conventional mortgage underwriting practices. Rent data reflect HUD’s estimated 2011 Fair Market Rents. The income needed to afford rents was calculated under the assumption that affordable rents do not exceed 30% of household income.
The report and an interactive tool to examine the mismatch between wages in 72 occupations and housing costs across the country are available on the National Housing Conference’s webpage at http://www.nhc.org/chp/p2p_2011_q1/index.php