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NHC’s annual release of Paycheck to Paycheck provides insights into the ability of working households to afford typical housing in metropolitan areas across the country. The published report highlights the housing affordability challenges of workers within the construction industry across 390 metropolitan areas. See our methodology for more information on how we come up with our numbers (or use the same methodology to do your own analysis).

The full Paycheck to Paycheck data tool includes:

  • Graphs that compare wages and housing costs in 390 metro areas and the nation
  • Median incomes for 147 occupations
  • Median home prices and the income needed to afford them
  • Fair market rents and the income needed to afford them

Metropolitan Areas

Select one of 390 metropolitan areas

- OR -

Occupations

Select one of 149 occupations

Report and Rankings

Previous releases of Paycheck to Paycheck:

* In a few select cases, 2003 and 2005 wage data may not be comparable due to a change in methodology.

Paycheck to Paycheck can be viewed using a recent internet browser.
Flash support is required for first quarter 2011 findings and earlier.

Methodology

Paycheck to Paycheck uses three data sources:

Using these three sources, we estimate the annual salary needed to afford to sustainably own or rent a home in 390 metropolitan areas, and compare that to the median annual salary for 147 occupations. (Due to regional differences in employment levels, BLS does not provide wage data for certain occupations in certain metropolitan areas. We are unable to compare wage and housing price data for those occupations in those areas.) We assume that rent should represent no more than 30% of one’s gross income, and that costs associated with homeownership should represent no more than 28% of one’s gross income (given the need to be able to pay for unforeseen maintenance costs).

When calculating the salary necessary to afford homeownership in a given metropolitan area, we assume the prevailing annual percentage rate (APR), property taxes equal to 1.1% of the value of the home annually, homeowner’s insurance equal to 0.35% of the value of the home annually, and private mortgage insurance equal to 1% of the value of the home annually.

Our affordability calculations are based on monthly housing costs, principally rent and mortgage payments. They do not account for other barriers to obtaining housing, such as saving up for a down payment, exclusionary zoning that renders neighborhoods near jobs and transit prohibitively expensive, or discrimination.

Job loss, housing composition changes, and personal preferences mean that many households rely on just one income to get by. In recent years, about a third of households in the United States had just one wage earner, and the median number of earners per household is around 1.3.

The full Paycheck to Paycheck data tool includes:

  • Graphs that compare wages and housing costs in 390 metro areas and the nation
  • Median incomes for 147 occupations
  • Median home prices and the income needed to afford them
  • Fair market rents and the income needed to afford them

Frequently Asked Questions

For the metro area I checked, homeownership seems to be affordable for most occupations. What does this mean?

In markets where low- and moderate-income workers can afford the mortgage for a median-priced home, workers may still face barriers to homeownership.  Amassing a down payment (we assume 10 percent down), getting access to credit, and affording the bills for utilities, maintenance, and repairs can be substantial additional burdens, especially for working families.

Why do you calculate affordability based on just one income?

Job loss, household composition changes, and other factors mean that many households find themselves relying on just one income to get by.  In recent years, single-wage-earner households account for just under 40 percent of all U.S. households.  The median number of workers per household is typically around 1.5. For many lower-wage jobs, even two earners would not have enough income to afford housing in moderate or high-cost markets.

Notes

Paycheck to Paycheck 2021 uses total cash compensation data for workers’ salaries instead of base pay data used in versions prior to 2013. Total cash compensation includes base pay, tips, and short-term performance bonuses but not overtime or holiday pay, or hiring and retention bonuses. As a result, Paycheck to Paycheck 2021 is only comparable to Paycheck to Paycheck after 2013.

The total number of metropolitan areas for which data are available is not always 390, as complete data on home sales were not available for all years.

Acknowledgements

The National Housing Conference gratefully acknowledges the support of the Fannie Mae and Wells Fargo for “Paycheck to Paycheck 2021.”