I polled 250 people in the Charlotte area, asking about housing to get a pulse on what locals think of the current market. I've highlighted a few of the takeaways below, such as how much people think they need to earn to buy a starter home, the average monthly cost expectation, which race is most interested in buying, and a few key differences between men's and women's home purchase expectations.
People aren't too far off from reality based on the numbers above. A $480k mortgage costs around $3,200/mo if we assume a 7% int. rate, not including property taxes or homeowners insurance. If we earn $200k/yr, our net monthly pay would be around $12k, and 30% of 12k is $3,600. For the record, I don't recommend spending more than 30% of net income on housing; however, there are scenarios where this line can be moved. I've written more on this in "How Much Do You Need To Earn To Afford a $500,000 House?"
Which Age Group Is Looking To Buy In The Next 12 Months?
It is logical that the majority of individuals aged 54 and above were homeowners prior to the surge in housing prices caused by COVID. Consequently, they have chosen to stay put in their homes for the recent years. Conversely, younger generations have shown varying trends - some have not entered the housing market, while others are expanding their families or relocating due to work, making them keen on purchasing a property.
Which Job Type Is Most Likely To Buy In The Next 12 Months?
It surprised me that construction and manufacturing jobs were more likely to purchase a home in the next 12 months than those in Finance and insurance industry, but the most shocking statistic was that 0% of those working in Government or Hotel/Food service jobs were looking to buy.
Which Race Is Most Likely To Buy In The Next 12 Months?
Male Vs. Female Housing Expectations
Most men expected the monthly cost of owning a home to be around $700 higher than their female counterparts. There was a time in 1960 where $700 was the average monthly mortgage cost... Oh how times have changed.
Also, when asked who was most interested in purchasing a home in the next 12 months, men were 22% more likely to say yes than women. This could mean that women used the NY Times buy vs. rent calculator and decided they’d rather invest their money in something with higher growth potential than a single-family home or that they prefer the flexibility of renting. It’s hard to say precisely.
Summary
Despite the presence of outliers in the data set, the averages related to home cost, affordability, and income expectations appear to be accurate. Some unexpected discoveries were made concerning race and gender, but this adds an element of excitement to conducting research projects. Housing is currently a widely discussed topic, with prices and affordability having increased to the point of being unaffordable for many. Nevertheless, I firmly believe in the human capacity to creatively adapt to overcome challenges, and this situation may require such adaptation. I hope you learned something today, and please don't hesitate to reach out with any questions or comments.
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