Here’s How Unaffordable NYC Homes Really Are

NEW YORK — Many New Yorkers may dream of buying a home, whether it's a Brooklyn Heights brownstone or an almost suburban house in eastern Queens. But a new report suggests housing is unaffordable for the typical worker in all five boroughs.

In the report published Thursday, ATTOM Data Solutions crunched housing and wage numbers for 473 of the nation’s more than 3,000 counties nationwide. It determined affordability by assuming a 28 percent maximum “front-end” debt-to-income ratio. That means a buyer purchasing an affordable home would not be spending more than 28 percent of their income on house payments including insurance, mortgage and property taxes.

Every New York City borough is considered unaffordable, meaning median home prices in the first quarter of this year were too expensive for average wage earners. That was the case in 71 percent of the counties that were analyzed.

The city's highest shares of income needed to purchase a median home were seen in Brooklyn and Manhattan, where a buyer needs 115.9 and 115 percent of the average annual earnings, respectively, the report shows.

Things weren't as bad — though still pretty dismal — on Staten Island, where the costs of buying a home eats up 72.4 percent of the average annual wages of $51,337, according to the report.

"(I)f you earn the typical wage for residents of Staten Island (Richmond County), and don't have other sources of money, you need to look for a much cheaper house than the typical one there," Todd Teta, ATTOM's chief product officer, said in a statement.

"The median price of $490,000 on Staten Island is out of your reach. It's not quite as out of reach as the median price in other parts of New York City, like Brooklyn, Manhattan or Queens," Teta added. "But still out of your league."

ATTOM's affordability index took median home prices from public sales deed data. Average wage figures came from the U.S. Bureau of Labor Statistics. In all, 231 million people live in the counties analyzed by the company.

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Affordability was based on the percentage of average wages necessary to make monthly house payments on a 30-year, fixed-rate mortgage. It also factored in a 3 percent down payment, property taxes, home insurance and mortgage insurance.

In other words, a household would need to earn $66,336 to afford the typical American home, which costs a median $237,500. The calculation assumes buyers won’t spend more than 28 percent of their income on housing.

“That required income is higher than the $56,823 annual income earned by an average wage earner based on the most recent average weekly wage data available from the Bureau of Labor Statistics, making a median-priced home nationwide not affordable for an average wage earner,” the authors wrote.

Counties where the typical home was unaffordable for average workers included Los Angeles County, San Diego County and Orange County in California, as well as Maricopa County in Arizona and Miami-Dade County in Florida.

Conversely, Cook County, Illinois, which includes Chicago, was identified as one where homes are still affordable for typical American workers. Others include Harris County in Texas, Wayne County in Michigan, Philadelphia County in Pennsylvania and Cuyahoga County in Ohio.

“We are seeing a housing market in flux across the United States, with a mix of tailwinds and headwinds that are pricing many people out of the housing market, but also are creating potentially better conditions for buyers,” Todd Teta chief product officer at ATTOM, said in a release. “Continually rising home prices in many areas do remain a financial stretch — or simply unaffordable — for a majority of households.”

Teta noted that quarterly wage gains have outpaced price increases for more than a year. Mortgage rates are also falling. This helps make homes “a bit more affordable.”

Unaffordable housing is among the key reasons non-homeowners say they don’t currently own a home. According to Statista, in the fourth quarter of 2018, 43 percent of respondents said they simply couldn’t afford to buy their own homes. That number was down from 49 percent in the third quarter, and way up from 38 percent and 33 percent in the first two quarters.

Other respondents said their lives are too unstable and they need the flexibility renting allows. Still others simply said they don’t want the responsibility that comes with owning a home.

Here’s what the researchers found for each New York City borough.

Manhattan

• Affordability index (Under 100 is less affordable than historic average): 76
• Median sales price: $1,862,500
• Year over year annualized wage growth: 6.8 percent
• Year over year median home price growth: 33 percent

Brooklyn

• Affordability index (Under 100 is less affordable than historic average): 92
• Median sales price: $760,000
• Year over year annualized wage growth: 5.8 percent
• Year over year median home price growth: 0 percent

Queens

• Affordability index (Under 100 is less affordable than historic average): 91
• Median sales price: $630,000
• Year over year annualized wage growth: 6.9 percent
• Year over year median home price growth: 7.7 percent

The Bronx

• Affordability index (Under 100 is less affordable than historic average): 91
• Median sales price: $445,000
• Year over year annualized wage growth: 5.7 percent
• Year over year median home price growth: 11 percent

Staten Island

• Affordability index (Under 100 is less affordable than historic average): 101
• Median sales price: $490,000
• Year over year annualized wage growth: 7.3 percent
• Year over year median home price growth: 1 percent

Patch national staffer Dan Hampton contributed to this report.