Mortgage rates are nearing all-time lows, but that doesn’t mean everyone can afford to buy, according to a recent Zillow release. The study says low-income earners in the U.S. can expect to devote an average of 22.7 percent of income toward mortgages, compared to high-income earners spending just 11.5 percent of income on mortgages. Of course, buying a median-priced home eats up more of a smaller paycheck than a larger one, but Zillow categorized percentage of income based on home prices in three separate tiers. Essentially, the study does not assume low-income earners are buying the mid-range or priciest homes in any given market. Rather, Zillow assumes they are buying the cheapest homes. Assuming low-income earners buy less expensive homes, median earners buy median-priced homes and high-income earners by homes in the top third of the market, Zillow says low-income earners still face the heaviest cost burdens. Why are low income earners spending so much more, even...
- Zillow says low-income earners can expect to devote 22.7 percent of income toward mortgages, compared to high-income earners spending just 11.5 percent of income on mortgages.
- In a third of U.S. markets, low-income earners should expect to spend over 30 percent of income toward housing.
- Bottom tier buyers in San Francisco spend a whopping 68.4 percent of income on mortgages.
- In Chicago, low-income buyers can expect to spend 22.1 percent of income on mortgages.