The affordable housing shortage is having a negative effect on the job market. That’s according to a National Association of Realtors (NAR) study. NAR research suggests “a decline in affordable housing not only makes it difficult for homebuyers to find their dream home, but it also has a negative effect on the job market.”
The NAR research includes the Housing Affordability Index (HAI) in metro areas. The HAI “measures whether or not a typical family earns enough income to qualify for a 30-year fixed mortgage loan on a typical single-family home without spending more than 25% of the income on payment for principal and interest.”
The city of Kankakee, Illinois was in the Top 5 of housing affordability back in 2014. It dropped to 23 by 2018 and landed at 32 in Q3 2019. As Kankakee’s HAI rank fell, so did it’s non-farm-related job growth. This slowed by roughly 1.2 percent in the third quarter of 2019 from the average growth between 2014-2018.
In some cities where job growth was strong, housing affordability staggered.
In some cities where job growth was strong, housing affordability staggered. For example, the HAI for sunny Lakeland-Winter Haven in Florida dropped 45 spots in 2019, meaning housing became more expensive over time and less affordable. This correlates to a one percent drop in average job growth.
There are a number of calculators that will tell you how much mortgage you can afford based on your location, salary, debts, etc. There is also a calculator for “Rent vs. Buy.“