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Skyrocketing home values and rent make the jump to ownership even more challenging
SEATTLE, March 18, 2022 /PRNewswire/ -- The term "household income" was given new meaning in 2021 as a banner year for home appreciation found houses themselves earning more than the median worker in major metros across the country, according to a new study by Zillow®.
"More than anything, 2021 was a year of haves and have-nots, and the chasm between the two widening throughout," said Zillow economist Nicole Bachaud. "Those who owned a home saw their household wealth increase dramatically. But many renters witnessed that dream either soar out of reach or had to drastically adjust their expectations and plans."
Home value appreciation in 2021 was higher than median incomes in 25 of 38 major metropolitan areas studied by Zillow, with appreciation reaching higher than $100,000 in 11 of them. Though San Jose has the highest median income at $93,000, it also led all major metros in annual home value appreciation — with the typical home growing a whopping $229,277 over 2021, nearly what oral surgeons make.
Expensive coastal markets in California and Hawaii saw home value growth wallop local median incomes by the largest amounts. San Jose led but San Francisco closely followed, with homes earning $129,914 more than the median salary. Boise, Salt Lake City, Seattle and Phoenix rounded out the top 10.
Metropolitan areas with the lowest home price appreciation relative to median incomes were Detroit, St. Louis and Baltimore, though even the smallest home value growth among these metros, in St. Louis, was still higher than $27,000.
While homeowners watched their assets multiply in 2021, the chasm separating many renters from homeownership widened, as home prices skyrocketed and rising rents eroded their ability to save for a down payment.
Rents rose 16% across the U.S. in 2021 and upward of 25% in popular Sun Belt locales like Miami, Phoenix and Las Vegas. Locking in a one-year lease on a typical U.S. rental cost $3,072 more at the end of the year than the start of the year. It was $7,104 more in Miami, $4,644 more in Phoenix and $4,380 more in Las Vegas — major hits to a household budget, as that money can't be saved toward a down payment.
At the same time, down payments — often the highest hurdle to homeownership for first-time buyers — rose by more than $10,000 in 2021 for a typical 30-year fixed mortgage. Sticking with our metros used in the rent comparison, typical down payments rose nearly $14,500 in Miami, more than $20,600 in Phoenix and $16,700 in Las Vegas.
Metro Area* | Home Value GrowthDecember 2020 – December 2021 | Median Pretax Income, 2021** | Home ValueGrowthMinus Median Income | 2021 Rise inFull-Year Rent Payments | U.S. Profession'sMean Annual Wage Closest to 2021 Home Value Growth*** |
United States | $52,667 | $50,000 | $2,667 | $3,072 | Directors, religious activities andeducation |
New York– Newark— Jersey City | $63,928 | $60,000 | $3,928 | $4,656 | Judicial law clerks |
Los Angeles– Long Beach– Anaheim | $131,979 | $50,000 | $81,979 | $3,924 | Judges, magistrates |
Chicago– Naperville– Elgin | $34,918 | $57,000 | -$22,082 | $2,028 | Other protectiveservice workers |
Dallas–Fort Worth– Arlington | $69,488 | $50,000 | $19,488 | $3,156 | Human resource specialists |
Houston– The Woodlands– Sugar Land | $45,250 | $50,000 | -$4,750 | $2,004 | Dental laboratorytechnicians |
Washington, D.C.– Arlington-Alexandria | $56,163 | $75,000 | -$18,837 | $2,700 | Loading machine operators,underground mining |
Miami– Fort Lauderdale– West Palm Beach | $72,053 | $40,000 | $32,053 | $7,104 | Public relations specialists |
Philadelphia–Camden– Wilmington | $39,994 | $60,000 | -$20,006 | $2,160 | Supervisors of foodpreparation and serving workers |
Atlanta– SandySprings– Roswell | $73,036 | $50,000 | $23,036 | $4,008 | Soil and plant scientists |
Phoenix– Mesa– Scottsdale | $103,470 | $52,000 | $51,470 | $4,644 | Education administrators, K–2 |
Boston– Cambridge–Newton | $76,616 | $66,852 | $9,764 | $3,948 | Arbitrators, mediators |
San Francisco– Oakland-Hayward | $204,914 | $75,000 | $129,914 | $3,540 | General internal medicine physicians |
Riverside– SanBernardino– Ontario | $111,014 | $45,000 | $66,014 | $4,560 | Air transportationworkers |
Detroit– Warren– Dearborn | $29,675 | $57,000 | -$27,325 | $1,644 | Gambling cageworkers |
Seattle– Tacoma– Bellevue | $131,129 | $65,000 | $66,129 | $3,816 | Computer and information researchscientists |
Minneapolis– St. Paul– Bloomington | $39,942 | $60,000 | -$20,058 | $1,020 | Gamblingsurveillance officers |
San Diego— Carlsbad | $160,493 | $54,703 | $105,790 | $4,932 | Computer andinformation systems managers |
Tampa– St.Petersburg– Clearwater | $74,754 | $46,000 | $28,754 | $5,292 | Criminal justice teachers, postsecondary |
Denver– Aurora– Lakewood | $108,922 | $65,000 | $43,922 | $2,928 | Electrical engineers |
St. Louis | $27,741 | $50,000 | -$22,259 | $1,428 | Cooks and food preparation workers |
Baltimore– Columbia– Towson | $36,984 | $60,000 | -$23,016 | $2,316 | Medical assistants |
Charlotte– Concord– Gastonia | $71,804 | $57,000 | $14,804 | $3,384 | Commercial divers |
Orlando– Kissimmee– Sanford | $64,638 | $44,384 | $20,254 | $4,380 | Set and exhibit designers |
San Antonio– New Braunfels | $54,769 | $46,966 | $7,803 | $2,292 | Counselors |
Portland– Hillsboro–Vancouver | $83,283 | $60,000 | $23,283 | $2,520 | Speech-language pathologists |
Las Vegas–Henderson– Paradise | $83,894 | $46,000 | $37,894 | $4,380 | Nuclear technicians |
Kansas City | $40,846 | $50,000 | -$9,154 | $1,368 | Mixing and blending machine setters,operators |
San Jose– Sunnyvale– SantaClara | $229,277 | $93,000 | $136,277 | $3,108 | Oral and maxillofacial surgeons |
Nashville–Davidson– Murfreesboro– Franklin | $84,395 | $50,000 | $34,395 | $3,372 | Emergency management directors |
Providence–Warwick | $66,657 | $55,000 | $11,657 | $2,364 | Court reporters andsimultaneous captioners |
Oklahoma City | $26,866 | $44,044 | -$17,178 | $1,584 | Food preparationworkers |
New Orleans– Metairie | $31,945 | $47,000 | -$15,055 | $2,628 | Textile machinesetters, operators and tenders |
Salt Lake City | $119,539 | $53,638 | $65,901 | $3,156 | Computer networkarchitects |
Birmingham– Hoover | $31,968 | $50,000 | -$18,032 | $1,476 | Helpers - production workers |
Urban Honolulu | $138,254 | $51,000 | $87,254 | $2,820 | Operations specialties managers |
Omaha– CouncilBluffs | $31,114 | $50,000 | -$18,886 | $1,236 | Funeral attendants |
Albuquerque | $47,215 | $45,000 | $2,215 | $2,736 | Educational instruction andlibrary workers, all others |
Boise City | $124,979 | $50,000 | $74,979 | $3,240 | Health specialtiesteachers, postsecondary |
*Table ordered by size rank |
** Median inflation-adjusted pretax wage and salary income data from the Current Population Survey Annual Social and Economic Supplement |
*** Occupation wage data from May 2020 National Occupational Employment and Wage Estimates United States |
About Zillow GroupZillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and ease.
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SOURCE Zillow
