Which Industries Can Afford Homes?

New analysis from the National Association of Realtors looks at average wages across industries and how they affect home affordability.

Table 1 below shows the mortgage-to-income shares for nonfarm workers. The calculations show that if a household has only one single earner working in the private sector, the household will likely spend 29 percent of income on a mortgage, which makes a home purchase unaffordable. Housing will be most unaffordable for single-earner households in the leisure & hospitality industry (66%), retail trade (47%), other services (31%), education & health services (31%), transportation & warehousing (29%), and manufacturing (25%). This means that other members of the household need to work or contribute to the mortgage payment (e.g., spouse, working adult children, relatives, room renters, etc.) to make a home purchase more affordable. This may help explain the trend towards multi-generational housing where adult children continue to live with their parents, perhaps to both care for their parents and/or to help pay the mortgage.

Workers who are able to afford a home as a single-earner household will likely be those employed in the construction industry (23%, possibly the white-collar employees), professional and business services (23%), wholesale trade (23%), financial activities (21), information services (19%), mining and logging (18%), and utilities (16%).

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