For most, owning a home in New York is all but a pipe dream. Just over half (51 percent) of the city’s residents are renters—compared to 37 percent nationally—and there are more renters than homeowners in almost every single age group across the five boroughs.
The reason for this trend isn’t complicated: New York is one of the most expensive cities in the country, and the cost of homes are out of reach for the majority of the population. The median income in the city hovers around $55,000, while the median home price is a whopping $1.6 million. That disparity, along with a medley of other factors, helps explain why so few New Yorkers are homeowners.
But exactly how much money does one need to make each year to join the select few who are able to own a residence in the city? According to a new report put out by Unison, a home ownership investment firm, New Yorkers need to rake in more than $400,000 per year in order to be the master of their digs (at least in Manhattan).
The study scraped recorded property data from cities across the country and broke down the monthly mortgage payments for the median price when homebuyers pony up for down payments of five, 10 and 20 percent. The analysis assumes that buyers will not spend more than 30 percent of their annual income on housing costs.
The report paints a pretty grim picture for anyone who is hoping to one day own a spot in New York. If you put five percent down on a median-priced home in Manhattan, you’ll need to make $454,000 a year in order to afford mortgage payments. That income requirement drops to $350,000 if you manage to scrape up a 20 percent down payment, which is still well out of most New Yorkers’ range.
Off the island, the picture gets slightly prettier. To cop an average home in Brooklyn, a buyer would have to earn between $210,000 and $273,000. In the Bronx, those figures dip even more to $107,000 to $139,000. And in Staten Island, homeowners have to earn $108,000 to $140,000 in order to afford the mortgage payments on a median-priced home.
But at the end of the day, the bar to entry for the residential real estate market in New York is significantly higher than what most of the city’s households earn. If the American dream of yore was to give every hardworking resident easy access to homeownership, then its modern version in Gotham is to skimp by for decades, earning just enough to cover rent. Or perhaps it’s evolved into one in which folks get their parents to pay for their apartments so that they can post photos of brunch on Instagram. In any case, the state of real estate in the city is truly depressing.
For the full article from Time Out, click here.