A typical rent eats almost 47% of an average teacher’s salary while mortgages take up only 27%
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Teachers who already own a home are at an advantage compared to those renting, according to Zillow’s latest analysis.
Due to the benefits of low interest rates and fixed-rate mortgages, entry-level teachers nationwide pay an average of 26.6% of their income for the typical mortgage payment in 31 of the 50 metros analyzed. The highest-paid teachers can afford mortgages in all but the priciest metros in California.
Teachers dedicate a chunk of their incomes on various household expenses such as property taxes, insurance, and common home maintenance. Homeownership is still affordable in many markets even after these expenditures, assuming that they have already put 20% down.
On the flip side, entry-level teachers struggle to afford a typical rental. Starting teachers dished out nearly half of their salaries on the typical rent in 19 of the 50 largest US metro areas.
On average, 46.8% of the entry-level teacher’s salary would be needed to pay the median rent, according to Zillow. Meanwhile, mid-career teachers have to pony up 35.6% of their salary, and the highest-paid teachers would have to dedicate 26.6% to rent.
Starting teachers in San Francisco and San Jose cannot afford the typical home or rental, as median payments are greater than their total salary. Some options to ease the burden of rent costs may be finding a roommate or moving back in with their parents. San Francisco renters can save over $1,000 a month by co-living with other people, according to a HotPad analysis.
Only the rent in Pittsburgh was within reach for starting teachers, while those with higher salaries would find the average rental affordable in more than half of the 50 largest metros.
"Most acknowledge that building more homes is required to address the root cause of eroding housing affordability most," said Skylar Olsen, director of economic research at Zillow. "Without that new influx to take the pressure off rent and aggressive home value growth, it's the public servants, like teachers, firefighters, and nurses – the professions that keep us safe, our kids smart, and our families healthy – that often feel the pinch. So don't think of housing affordability policies as a choice between change and the status quo. Crowded, job-rich communities will change — and it will be either the buildings that change or the mix of people who can afford to live in them."
