Of all the homes currently for sale in California’s most populous counties, only 17 percent are affordable on the average California teacher salary of $73,536. This represents a 13 percentage point decline in affordable housing since 2012 when nearly 30 percent of all homes for sale were within reach on the then average salary of $70,487.
Although California’s teachers are making more money than they were four years ago (significantly more in some counties), the percentage of homes affordable to local teachers declined across the board in every county we studied.
Methodology: Using data from the Bureau of Labor Statistics, we calculated the average salary by county as well as the entire state for elementary, middle, and secondary teachers (except special education). Based on these average salaries, we calculated the maximum monthly mortgage payment using a 30% of gross income threshold. We also calculated an estimated max home price, assuming a 3.5 percent interest rate. Next, we looked at all listings active on the market in each county as of September 6th 2016, along with the estimated property tax rates. Using the listing details, we calculated the estimated monthly mortgage cost with a 3.5% interest rate and 10% down payment to determine the percentage of homes where the monthly mortgage payment was equal to or less than the max monthly mortgage payment possible on the average teacher’s salary for each county, as well as the state overall.
We then performed the same analysis for August 2012 to make a four-year comparison in salaries and affordable listings by area. You can download the complete spreadsheet with the results of our analysis here, check out the code and methodology here, and view the full post here.
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