Homebuyers in the New Haven metropolitan area need to earn more than $66,000 a year, while in the Hartford area they have to make nearly $62,000, in order to afford the median priced home, according to a national study.
Teachers, police officers and nurses earning the average annual incomes for their occupation could not afford to buy a median-priced home in either the Hartford or New Haven metro areas, the study reveals.
The study, “Paycheck to Paycheck: Wages and the Cost of Housing in America,” reveals how incomes are lagging behind housing costs nationwide. The study was conducted by the National Housing Conference’s Center of Housing Policy, which has published a series of reports in the past five years highlighting the growing numbers of working families with critical housing needs.
The Center of Housing Policy’s study looks specifically at five occupations – elementary school teachers, nurses, police officers, retail salespersons and janitors – and compares their incomes to home prices and rents in 136 of the largest housing markets.
This year’s study was released in coordination with a similar county-specific study that was led by the National Association of Counties (NACO) and was funded by Freddie Mac. In the county-specific study, researchers examined the earnings of police officers, firefighters, elementary school teachers, retail salespersons, janitors and construction workers and compared their purchasing and renting power in 30 counties.
While many experts have focused on housing affordability issues in the Northeast and West, the latest study findings show that people in key occupations living in parts of the South also are having a tough time affording housing.
Not an Issue
In the New Haven metro area, the median home price reached $214,000 last year. A homebuyer in the area would need to earn $66,698 a year to afford a median-priced home – or roughly $10,000 to $23,000 more than the average annual incomes of elementary school teachers ($56,420), police officers ($50,690), and licensed practical nurses ($43,130).
Frank J. D’Ostilio, president of the Orange-based William Orange Realty and president of the Greater New Haven Association of Realtors, said the New Haven area is not facing an affordability issue.
“Greater New Haven offers a diversity of housing stock. There’s typically something available for everyone’s budget,” said D’Ostilio.
The area has an “undersupply” of homes for sale, according to D’Ostilio, and is still seeing price increases.
Buyers who are having trouble affording a home, can choose a multifamily home or condominium in the area, he said. In addition, there are programs to help buyers in the area, including the Yale Homebuyer Program, which helps employees who purchase homes in designated areas of New Haven. The program, offered by Yale University, provides $7,000 at the time of a home purchase and nine additional annual payments of $2,000. Since the program was initiated in 1994, more than 620 faculty and staff members have participated in it.
“That’s one of the most successful homebuyers’ programs,” said D’Ostilio.
Meanwhile, renters in the New Haven area would have to make $17.40 an hour to be able to afford a two-bedroom apartment in the area, significantly more than the median hourly wages of sales clerks ($9.29) and janitors ($10.95). Last year’s fair market monthly rents in the New Haven area, which are determined by the federal government, were $733 for a one-bedroom apartment and $905 for a two-bedroom unit.
In the Hartford metro area, the median home price of $198,000 was out of the reach of most teachers, police officers and nurses who work in the area. A household would have to earn $61,711 to be able to afford a median-priced home in the area, more than the average income of teachers ($53,610), police officers ($50,220) and nurses ($44,120).
While teachers, police officers and nurses are able to afford rents for one- and two-bedroom apartments in the Hartford area, sales clerks and janitors are out of luck. A renter needs an hourly wage of $12.23 for a one-bedroom and $15.63 for a two-bedroom. Sales clerks’ and janitorial median hourly wages in the Hartford area are $9.63 and $10.90, respectively.
