Hey Renters! Ever wondered how long it would take for you to pay off a house in the DC metro area? Here’s a rough guide.
I’ll start off by saying I am not a housing market expert, and have never bought a house, but I took some commonly accepted numbers and made this map of average length of mortgage by census tract for the DC metro area. I based my calculations on the following assumptions:
– 20% cash down payment (previously saved) ( Source)
- 30% of income contributed toward mortgage ( Source)
- Average household salary per census tract ( American Community Survey 2010)
- Average house value per census tract (American Community Survey 2010)
Of course these numbers are not going to represent everyone’s reality. For example, I did not take into account interest rates, and I assumed that income will be constant as well as the percentage of income contributed to the mortgage (which in reality would most likely not be true). Also, saving up 20% for a down payment is often out of reach for many people, especially these days.
I also overlaid proportional circles (once you zoom in a few levels) showing the percent of the population that holds a bachelor’s degree or higher. The thought behind displaying that data is that it “should” be correlated with average income if you’re lucky.
You can see that a lot of the map looks to fall in the 10-15 year range (light pink). I assume those people might choose to have a lower monthly payment and extend their mortgage a bit longer, but in terms of analysis, it is good to see that a lot of the metro area appears to be in balance. Meaning, housing prices are on par with the average income. In the NW Maryland suburbs, you’ll see $1,000,000 houses with average incomes of $200,000, and in the SE Maryland suburbs, you’ll see $300,000 houses with $70,000 incomes. (By the way, those tracts that have $1,000,000 homes actually are 1 million or above.)
The more consistently dark area is the one where many of us live.* From Shaw following Georgia Ave straight up to the top of DC, that is where the income and housing prices are a bit more in disparity. Does living in a $600,000 house with an income of $50,000 sound familiar to you? These are areas where many people are renters, and probably can’t easily afford to buy the house they live in on their current income.
What do you see on the map that is interesting to you? Do you have other theories about the dark spots and light spots?
*Looking at DC, there are a few spots that need to be disregarded. Why, you might ask, is the average income of the West End so low at around $11,000? Most of that census tract is devoted to GWU. I’d say the same goes for the UMD area. I’m sure AU and Georgetown have a bit of an effect as well, but those areas have many more wealthy residents than the others I mentioned.