Compiled by Lorimer Wilson
This infographic takes a detailed look at:
- Mortgage Debt By State
- Average Monthly Mortgage Payment By Metropolitan Area
- Changes In Total Outstanding Mortgage Debt By Year
- Salary Needed To Buy A House In Various Metropolitan Areas
- Changes in House Prices Since the Bubble Burst (2007-2017)
- The Price Of A Starter Home In Each State
- Amount Of Monthly Income Needed To Rent A House By State
- Cost of Renting vs. Owning a Home By State
1. Mortgage Debt By State
…Residents of some states incur significantly more mortgage debt than residents in other states…[The] visualization [below] takes a closer look at how housing debt varies by state, as measured by mortgage balance per capita.
2. Average Monthly Mortgage Payment By Metropolitan Area
The median home prices where you live determine not only how much you will need to amass as a down payment, but also what your monthly mortgage payment will be.
3. Changes In Total Outstanding Mortgage Debt By Year
As housing prices increase (the median home value in the U.S. was $30,600 in 1940 (adjusted for inflation) and $193,500 by 2017) so does the amount of mortgage debt that a home buyer must take on in order to afford a home…[The] visualization [below] takes a closer look at how mortgage debt in the U.S. has changed over time.
…The chart above represents a timeline of mortgage debt, shown in circle form.
- The top of the circle starts with 1949, and the years progress in a clockwise direction until 2018, the most recent full year.
- For each year, the amount of outstanding mortgage debt is represented by smaller, stacked dots, with each dot representing $400 billion…
- Years with yellow dots mean that the total mortgage debt is under $1 trillion, while orange dots represent $1 trillion to $10 trillion and the red dots represent more than $10 trillion in mortgage debt.
4. Salary Needed To Buy A House In Various Metropolitan Areas
…Some parts of the U.S. are friendlier to potential home buyers’ wallets than others…[The] visualization [below] illustrates the salary that a household needs to make in order to buy a median-priced home in the 50 largest metro areas in the U.S.
- median house prices are now higher in 41 states plus Washington, DC than they were in 2007 but…
- 22 states have seen values climb by 20% or less over the course of 10 years [although]…
- prices have…surged to double-digit increases in a few locations [such as North Dakota (+82.3%), Colorado (+49.2%) and Texas (+42.4%) while
- the housing market doesn’t look so positive everywhere, especially in those states that have yet to recover [such as]…Nevada (-17.1%)…Rhode Island (-12.0%), Connecticut (-11.7%) and New Jersey (-10.0%).
…A starter home refers to a smaller, less expensive house that fulfills the buyer’s present needs, but that the buyer will probably outgrow over time…[The] visualization [below] compares the median value of starter homes across the states, as well as how the median value of starter homes compares to the median values of all homes within the state.
- The larger circles represent higher median home values and the smaller circles represent median home values.
- The shades of purple within the circle show the median value of starter homes, with darker purple representing more expensive homes.
- The blue outline of the circle represents the median value of all homes in the state.
- Thicker blue lines indicate that there is a greater difference between median starter home values and all median home values.
…You should spend no more than one-third of net income on housing, whether you rent or own your home but since costs differ dramatically based on location, the amount you need to earn to afford a decent home depends entirely on where you live.
[To create the map above] we:
- calculated the average price of a rental property (including multifamily units) for every state.
- Next, we figured out how much money a household would need to make to be able to afford that rental price. We simply used the rule of thumb that housing costs should be no more than 30% of net income, that is, your income after taxes, retirement contributions or anything else is taken out.
- We then created an intuitive and color-coded map of the results.
…Based on the rule of applying no more than one-third of income to housing, people living in the Northeast must earn at least twice as much as those living in the South just to afford rent for what each market considers an average home. There is indeed a real problem with affordable housing when most people can’t actually afford it.
8. Cost of Renting vs. Owning a Home By State
Both the map and the visualization below give us a unique insight into the age-old debate about the merits of renting vs. buying. For starters,
- it is definitely more financially savvy to purchase in the great majority of U.S. states.
- The only pocket where it’s better to rent than own is out West, plus a few outliers in Washington, DC, and Hawaii.
The primary benefit of renting an apartment is flexibility. Renters can move to a different neighborhood (or another city altogether) without worrying about selling their homes but, according to our latest analysis, that flexibility often comes at a cost—renting is more expensive on average in 40 out of 50 states.
…The map above provides an intuitive look at the geography of renting vs. owning. We used a simple cutoff to compare buying and renting—if the difference was less than $50/month either way, we classified the state as neutral…but, with a difference of more than about $50/month, the scales begin to tip in favor of one or the other.
We also wanted to visualize the numbers another way to understand the total cost of living across the U.S. so we created a stacked bar chart [below] comparing average monthly mortgage payments (pink) and monthly rent payments (blue). This approach lets you easily see which states have a significantly higher cost of living, and which are relatively cheap in comparison.
These are the ten states where it makes the least sense to rent a home (the amounts are for the average mortgage minus the average rent):
- New York: -$1,471
- Maine: -$675
- Rhode Island: -$656
- Massachusetts: -$586
- Illinois: -$471
- New Jersey: -$437
- Florida: -$404
- Vermont: -$379
- Pennsylvania: -$368
- Ohio: -$296
Our visualization also highlights the vast differences in the housing market across the country.
- At the very uppermost end of the spectrum, owners in Hawaii shell out an eye-popping $2,839 on average each month.
- Renters don’t fare much better, spending $2,300. Compare that to the bottom of the graph, where West Virginians spend a relatively tiny $778 to own a home or $1,000 as renters.
Across the country, the average difference is -$186 in favor of owning. That might not sound like a lot of money, but it comes out to $2,232 every year. Multiply that savings across a 30-year mortgage—and consider the prospect of building equity every month—and that’s real money.