DataInvesting

Census says income growth lowering barriers for new homeowners

Lower income markets outpaced in regard to income growth percentage
  • Lower income markets saw the highest year-over-year percentage growth in income.
  • Fresno and Bakersfield, California, were the only two cities in California to make the top 10 list of highest income growth, despite the higher income markets of San Francisco and San Jose.
  • Income-to-home price ratio in Houston is nearly 50 percent, whereas the same ratio in San Francisco is 10 percent.

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The U.S. Census Bureau released its yearly American Community Survey for 2015, showing median income increased 5.2 percent nationwide between 2014 and 2015. And in some markets -- most notably the lower-income ones -- percentage growth outpaced even the most lucrative markets. Trulia's chief economist Ralph McLaughlin examined the data. He offers three conclusions as to why incomes have grown across the country. First, he notes as unemployment drops, it's natural for income growth to occur. He supports this notion with an explanation about productivity increasing -- this in turn leads to to higher wages as a result of gained skills or technological advancements, he says. And lastly, he points out new business in markets not only brings more employees to earn more wages, but it injects money into the local economy, pushing everyone up. He offers a disclaimer, but points out that regardless of a powerful singular push in any one of the three options, "near ful...