Recent data shows that homeowners who live in Wayne County allocated 24.2 percent of their income towards housing costs in 2016. This ranks Wayne County as the number one county in New York for areas with the lowest proportion of income spent on housing costs.
Gavop used data collected by the United States Census Bureau to produce a study on homeowners costs as a percentage of income. The study analyzed real estate trends at the county level across the United States and found that Wayne County had a median income of $59,538 and a median housing cost of $6,060 per year for those with a mortgage. The 24.2 percent of income spent on housing costs is the proportion of income allocated to homeowner expenses including the sum of mortgage payments, real estate taxes, insurance, and utilities.
The percentage of income paid towards homeownership costs is a way to measure the level of debt one has to real estate expenses. Most banks use a measurement called “debit income ratios” when approving loans. In other words, it is a ratio of monthly debt payments divided by one’s gross monthly income. This analysis uses median income, home value, and median homeowner cost with a mortgage to replicate a similar debt ratio on the county level.
“In this study, we looked at annual housing costs as a percentage to gauge how much debt people owe to their living situation based on location,” said Gavop analyst Kevin Pryor. “Here, the numbers show that Wayne County residents had a median percentage of under one-fourth of their income spent on housing costs, resulting in a small debt to homeownership in the area.”
Areas like Wayne County that have low percentages of income spent on housing costs are at a low risk to economic pressures. When housing costs are low, people are better equipped to withstand factors like a rise or fall in unemployment or fluctuations in the housing market. Additionally, homeowners in these areas are less likely to go into foreclosures and less likely to experience financial issues when compared to homeowners who spend a large sum of money on their homes each year.
The County’s median housing cost in relation to income is less than New York’s rate of 39.5 percent, and the national level of 30.9 percent. Additionally, Wayne County’s low allocation of income to housing costs is influenced by the county’s below average annual housing cost of $6,060 compared to the national value of $17,832 and the state’s value of $24,240.
In contrast, areas that have high housing costs are also the most likely to be impacted by macroeconomic strains on the economy such as recessions or unemployment. This is because residents that pay a higher percentage of income on living expenses, like mortgages, have less money left over for other expenses and less money to put back into the economy.