Home Buying and Homeownership in High-Income Areas

By: Danielle Hale, Managing Director, Housing Research;  Hua Zhong, Data Analyst, and Nadia Evangelou, Research Economist

In some parts of the United States, a $100,000 income would suffice to rank you among the area’s elites; in other parts of the country, a similar income would not suffice to put you in the top half of recent home buyers. We reviewed data for the 186 counties with at least 5,000 home buying households in 2014. For the most part, these are more highly populated counties, but there are some counties with a large population of households who do not meet these criteria because they do not have many owners or recent movers[1].

In this blog, we look at the 41 counties where median income among recent home buyers[2] was greater than $100,000.


High-income home buyers are geographically dispersed but concentrated in or near major metro areas

While they are spread throughout the Northeast, Midwest, South, and West, every one of the 41 counties that made this list is in a metropolitan area.  The top twenty metro areas by population are well represented on the list.  Only Philadelphia, Miami, Phoenix, Riverside, Minneapolis, Tampa, and St. Louis are missing where in many cases recent buyers had incomes near but not quite over the $100,000 threshold[3].

California and New York are Expensive for Recent Buyers

Even though we are looking at higher-income areas, higher home prices show that relative to incomes, homes are still somewhat costly, especially in California. For all recent home purchasers in the US, the typical home price to income ratio was 2.3 to 2.8[4] while in areas with substantial home buying, the price to income ratio ranged from 2.8 to 3.1[5].

In these 41 high income purchase areas, the typical home price to income ratio was 3.5 to 3.7[6]. Notably, California counties on this list all had home price to income ratios of 4.0 or higher. A handful of New York counties: New York, Nassau, and Kings counties were the only other counties with price to income ratios of 4.0 or higher among recent home buyers.


However, Other Counties Remain Affordable in Spite of High Income Home Buyers

In contrast, high-incomes do not seem to be pushing up home prices in other high-income counties. In Washtenaw MI, Oakland MI, Montgomery TX, McHenry IL, Collin TX, Williamson TX, Hamilton IN, and Fulton GA home prices of recently purchased homes were less than 3 times the median income of those purchasers—much more in line with what is typical throughout the US. Washtenaw County, MI was the most affordable high income county with a price to income ratio of 1.7 among recent purchasers.  New York County, NY was the least affordable place among the large high income US counties with a ratio of 6.4 for recent purchasers.


Homeownership Rates vary

Homeownership rates vary substantially in these 41 counties. While the typical rate of homeownership among these larger, high-income counties matched that for all US counties (63.9 percent), there was a wide range: from 22.9% (New York, NY) to 81.0% (Williamson, TN). One reason why some of these areas may have lower rates of homeownership is the relatively high cost of housing in well-established areas with a history of high-paying jobs and economic vitality coupled with uneven income distribution. Only the high-income can afford the cost of housing in areas like New York County or Kings County, NY where prices are high but incomes do not necessarily match, so homeownership rates are lower (22.9 and 28.5 percent, respectively). In other areas, such as Nassau County, NY, high-incomes are more prevalent (50 percent of all households earn $100,000 or more versus only 40 percent in New York County and 22 percent in Kings County), so higher homeownership rates and higher incomes go hand in hand.


While Recent Buyers Had High Incomes, this is not Necessarily True for All Home Owners

Median incomes among recent home buyers were the determining factor in selection for this study, but in some areas, the profile of recent home buyers looks quite different from the profile of all home owners. In 83 percent of high-income counties (34 of 41) the median income of recent buyers exceeded the median income of all homeowners (of which new purchasers are typically 5.5 to 6.0 percent). In fact, this was more common in the high-income counties selected in the study than among all high mover counties in which recent buyer median income exceeded the median income for all home owners in only 63 percent of counties.

In 17 of the 41 counties selected for this study, the median income of all home owners did not exceed $100,000, though it remained quite high (ranging from $80,133 in Montgomery, TX to $99,724 in Contra Costa, CA). In two counties, Mercer NJ and Chester PA, the median income of all home owners exceeded $100,000 in spite of the fact that the median income of recent purchasers was just outside of this figure[7].

See how income, home price to income ratio and homeownership rate vary in all high-mover counties in the visualization below.

Dashboard 1  

[1] Bronx County NY, El Paso TX, Hudson NJ, Providence RI, Guilford NC, Camden NJ, Union NJ, Hampden MA, Kane IL, East Baton Rouge LA, Jefferson LA, Virginia Beach City VA, Richmond NY, Passaic NJ, Waukesha WI, Mobile AL, Berks PA, Orleans LA, Pulaski AR, Westmoreland PA, Seminole FL, Stark OH, Forsyth NC, Solano CA, Richland SC, Santa Barbara CA, Madison AL, St Louis City MO, Hamilton TN, Tulare CA, Lehigh PA, Nueces TX, Fayette KY, Luzerne PA, Albany NY, Orange NY all rank in the top 200 counties by total number of households yet do not have sufficient recent home buyers to have been reviewed in this study. Some are highly populated but have very low homeownership rates. Some have more typical rates of homeownership but lower rates of moving among homeowners.

[2] Recent home buyers are those who live in owner-occupied property who report moving into the property within the last year according to the Census Bureau’s 2014 American Community Survey.  This could include a small number of households who inherited or pre-purchased their homes, but it is a reasonable proxy for recent home buyers.

[3] Notably, Bucks, Chester, and Montgomery PA – all in the Philadelphia metro area and Hennepin MN in the Minneapolis metro area had median buyer incomes between $95,000 and $100,000, just outside of the threshold studied.

[4] The median price to income ratio among all counties in the US was 2.3, the average price to income ratio was 2.4, and the population weighted average price to income ratio was 2.8.

[5] The median price to income ratio among counties with greater than 5,000 recent home purchases in the US was 2.8, the average price to income ratio was 3.0, and the population weighted average price to income ratio was 3.1.

[6] The median price to income ratio among counties with greater than 5,000 recent home purchases in the US was 3.5, the average price to income ratio was 3.6, and the population weighted average price to income ratio was 3.7

[7] Mercer NJ had a median income of $85,699 among recent buyers while Chester PA recent buyers had a median income of $99,015.

Danielle Hale, Director of Housing Statistics

As a Research Economist at NAR, Danielle studies tax issues, the wealth impact of home ownership, and different measures of home prices.

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