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Housing Affordability Outlook is Encouraging for Military Households

November 6, 2019

SEATTLE, Nov. 6, 2019 /PRNewswire/ -- Active-duty military and veteran households are, on average, better able to afford housing than a typical U.S. household, according to a new Zillow® analysis.

Nationally, it would take 29.6% of the typical household income to pay the median rent – just below the 30% rule of thumb for affordable housing. Active-duty military households would spend 24.9% of their income on that median rent, while a typical household with one or more veterans would spend 20.1%.

The results are similar for homeowners. The typical household in the U.S. would spend 16% of its income on a mortgage payment for the median home, while active-duty military households would spend 13.4% and veterans would spend 10.9%i.

Improving the picture further are Veterans Affairs (VA) loans, which are available to military members and their families. VA loans typically offer lower rates, have more lenient credit requirements and do not require private mortgage insurance. About 77% of active-duty homeowners and 58% of veteran homeowners use VA loansii, which take the share of income spent on mortgage payments down to 12.6% for active-duty households and 10.2% for veterans.

“At a time when housing affordability is a real issue for so many, including public servants like teachers and fire fighters, the outlook is encouraging in much of the country for current and former service members and their families,” said Zillow Group Economist Joshua Clark. “Taking advantage of benefits like VA loans can really pay off as well. At current rates, a home buyer would save about $20,000 over the life of a loan on a typical home – and that’s before factoring in other benefits of VA loans such as not always requiring a down payment and limits on closing costs.”

There are only a few large metro areas where active-duty households have more difficulty affording housing than the population at large. Active-duty households in Seattle, San Diego and Portland typically spend a greater share of their income on mortgage and rent payments than the rest of the metro.

Military households in Florida enjoy the greatest relative affordability compared to their non-military neighbors. The gap in share of income spent on rent between active-duty households and the rest of the population is larger in Miami (15 percentage points), Orlando (11.7) and Tampa (11.3) than any other large U.S. metros.

Veteran homeowners and renters are typically better able to afford housing than non-veterans in each of the 35 largest metro areas in the U.S. Veterans in San Diego have one of the biggest advantages over non-veterans in both rent and mortgage affordability, despite active-duty households in San Diego being worse off than non-military households. This suggests that veterans are often able to transition into higher-paying jobs there once they have completed their military service.

Despite the relative advantage over the general population, the typical rent is still unaffordable for active-duty households in six of the 35 largest metros in the U.S., using the 30% standard. Mortgages are only unaffordable for active-duty military and veteran households in San Jose, the most expensive housing market in the country.

Rent Affordability for Military Households

Metropolitan Area

Median Rent

All Households -
Share of Income
on Median Rent

Veteran
Households -
Share of Income
on Median Rent

Active-Duty
Households -
Share of Income
on Median Rent

United States

$1,579

29.6%

20.1%

24.9%

New York, NY

$2,271

33.9%

22.0%

29.5%

Los Angeles-Long
Beach-Anaheim,
CA

$2,591

41.9%

27.0%

35.1%

Chicago, IL

$1,598

26.5%

18.3%

23.6%

Dallas-Fort Worth,
TX

$1,432

24.3%

16.4%

22.4%

Philadelphia, PA

$1,481

24.5%

16.7%

22.9%

Houston, TX

$1,373

24.8%

15.8%

18.5%

Washington, DC

$1,950

22.4%

15.4%

20.6%

Miami-Fort
Lauderdale, FL

$1,845

38.9%

22.3%

23.9%

Atlanta, GA

$1,439

25.2%

17.8%

21.6%

Boston, MA

$2,369

31.1%

21.6%

30.0%

San Francisco, CA

$3,150

34.8%

23.7%

33.9%

Detroit, MI

$1,193

23.2%

14.7%

15.1%

Riverside, CA

$1,900

34.6%

22.3%

32.2%

Phoenix, AZ

$1,380

25.4%

17.2%

24.6%

Seattle, WA

$2,005

27.7%

21.1%

35.2%

Minneapolis-St
Paul, MN

$1,482

22.0%

18.2%

16.3%

San Diego, CA

$2,489

36.7%

25.8%

42.0%

St. Louis, MO

$997

18.4%

11.8%

13.8%

Tampa, FL

$1,381

30.5%

17.7%

19.1%

Baltimore, MD

$1,596

23.9%

14.1%

19.9%

Denver, CO

$1,764

26.0%

19.3%

23.2%

Pittsburgh, PA

$1,094

21.1%

15.6%

13.8%

Portland, OR

$1,636

25.6%

19.4%

27.9%

Charlotte, NC

$1,308

24.5%

16.4%

19.3%

Sacramento, CA

$1,769

29.6%

19.3%

22.9%

San Antonio, TX

$1,207

24.6%

14.8%

17.2%

Orlando, FL

$1,400

29.2%

18.3%

17.5%

Cincinnati, OH

$1,132

20.9%

13.7%

N/A

Cleveland, OH

$1,059

23.2%

14.5%

N/A

Kansas City, MO

$1,110

20.0%

14.1%

15.4%

Las Vegas, NV

$1,310

25.9%

16.3%

19.4%

Columbus, OH

$1,183

21.0%

15.6%

13.4%

Indianapolis, IN

$1,082

20.7%

15.0%

15.7%

San Jose, CA

$3,308

31.6%

25.1%

N/A

Austin, TX

$1,569

24.4%

18.0%

21.8%

Mortgage Affordability for Military Households

Metropolitan
Area

Median
Mortgage
Payment
(Standard
Loan)

Median
Mortgage
Payment
(VA
Loan)

All Households
- Share of
Income on
Median
Mortgage
(Standard
Loan)

Veteran
Households -
Share of
Income on
Median
Mortgage (VA
Loan)

Active-Duty
Households -
Share of
Income on
Median
Mortgage (VA
Loan)

United States

$852

$797

16.0%

10.2%

12.6%

New York, NY

$1,655

$1,548

24.7%

15.0%

20.1%

Los Angeles-
Long Beach-
Anaheim, CA

$2,434

$2,276

39.3%

23.7%

30.8%

Chicago, IL

$845

$791

14.0%

9.1%

11.7%

Dallas-Fort
Worth, TX

$907

$848

15.4%

9.7%

13.3%

Philadelphia,
PA

$870

$813

14.4%

9.2%

12.6%

Houston, TX

$768

$718

13.9%

8.2%

9.7%

Washington,
DC

$1,523

$1,425

17.5%

11.2%

15.0%

Miami-Fort
Lauderdale, FL

$1,060

$991

22.4%

12.0%

12.8%

Atlanta, GA

$822

$768

14.4%

9.5%

11.5%

Boston, MA

$1,732

$1,620

22.8%

14.8%

20.5%

San Francisco,
CA

$3,508

$3,281

38.7%

24.7%

35.3%

Detroit, MI

$608

$568

11.8%

7.0%

7.2%

Riverside, CA

$1,385

$1,295

25.2%

15.2%

21.9%

Phoenix, AZ

$997

$933

18.3%

11.6%

16.6%

Seattle, WA

$1,834

$1,715

25.3%

18.1%

30.1%

Minneapolis-St
Paul, MN

$1,016

$950

15.1%

11.7%

10.5%

San Diego, CA

$2,211

$2,067

32.6%

21.4%

34.9%

St. Louis, MO

$624

$584

11.5%

6.9%

8.1%

Tampa, FL

$803

$751

17.7%

9.6%

10.4%

Baltimore, MD

$999

$935

15.0%

8.2%

11.7%

Denver, CO

$1,529

$1,430

22.6%

15.6%

18.8%

Pittsburgh, PA

$538

$503

10.4%

7.2%

6.4%

Portland, OR

$1,481

$1,385

23.2%

16.4%

23.6%

Charlotte, NC

$785

$735

14.7%

9.2%

10.8%

Sacramento,
CA

$1,539

$1,439

25.8%

15.7%

18.6%

San Antonio,
TX

$728

$680

14.8%

8.4%

9.7%

Orlando, FL

$895

$837

18.7%

10.9%

10.5%

Cincinnati, OH

$636

$595

11.7%

7.2%

N/A

Cleveland, OH

$547

$511

12.0%

7.0%

N/A

Kansas City,
MO

$716

$669

12.9%

8.5%

9.3%

Las Vegas, NV

$1,045

$977

20.7%

12.2%

14.5%

Columbus, OH

$723

$676

12.9%

8.9%

7.7%

Indianapolis,
IN

$623

$583

11.9%

8.1%

8.4%

San Jose, CA

$4,313

$4,033

41.2%

30.6%

N/A

Austin, TX

$1,165

$1,090

18.1%

12.5%

15.2%

About Zillow
Zillow® is transforming how people buy, sell, rent and finance homes by creating seamless real estate transactions for today’s on-demand consumer. Zillow is the leading real estate and rental marketplace and a trusted source for data, inspiration and knowledge among both consumers and real estate professionals.

Zillow’s proprietary data, technology and industry partnerships put Zillow at nearly every major point of the home shopping experience, helping consumers search for and get into their new home faster. Zillow now offers a fully integrated home shopping experience that includes access to for sale and rental listings, Zillow Offers®, which provides a new, hassle-free way to buy and sell eligible homes directly through Zillow; and Zillow Home Loans, Zillow’s affiliated lender that provides an easy way to receive mortgage pre-approvals and financing. Zillow Premier Agent instantly connects buyers and sellers with its network of real estate professionals to help guide them through the home shopping process. For renters, Zillow’s innovations are streamlining the way people search, tour, apply and pay rent for leased properties.

In addition to Zillow.com, Zillow operates the most popular suite of mobile real estate apps, with more than two dozen apps across all major platforms. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG) and headquartered in Seattle.

Zillow and Zillow Offers are registered trademarks of Zillow, Inc.

i Mortgage affordability calculations assume a 20% down payment and do not include other costs of owning a home such as property taxes, homeowner’s insurance and common homeowner maintenance
ii National Association of Realtors’ Veterans and Active Military Home Buyers and Sellers Profile

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SOURCE Zillow, Inc.