More than a quarter of Vancouver mortgage holders are spending more than 30 percent of their income on housing, according to a new report from Construction Coverage. That suggests an increasing number of local homeowners are cost-burdened by their mortgages.
The report examined whether wages were rising at the same pace as home prices. That showed not to be the case in Vancouver, nor in other Western cities and states. The trend, however, was also a national one. The study noted that the U.S. average income had risen by 61 percent since 2000, while the average home price increased 96 percent.
The average home price in Vancouver is $464,809, while the average income is $66,679, the study found. In Vancouver, that makes the home price-to-income ratio 7-to-1, while the national ratio is 4.7-to-1. The study noted that home prices in the city have increased by 60.5 percent in the last five years and 26.9 percent of mortgage holders are spending more than 30 percent of their income on housing.
Vancouver came in 37th on the list of 120 midsize cities with costly housing. The cities were ranked by the house price-to-income ratios. The midsize cities with the highest ratios were Glendale, Calif., at 15.8, Sunnyvale, Calif., at 12.8, Escondido, Calif., at 12.6, Garden Grove, Calif., at 11.3 and Honolulu at 10.8.
The study found that Western cities and states had the highest home price-to income ratios. Hawaii, California, Idaho, Oregon and Washington were the top ratios for states in the country. Each of the states had a ratio of more than 7-to-1. The study also indicated that more than 28 percent of mortgage holders in each of these states, except in Idaho, were paying more than 30 percent of their income on housing. In Hawaii, 40.9 percent of mortgage holders were spending more than 30 percent of their income on housing.
West Virginia had the lowest home price-to-income ratio of all the states at 2.5-to-1, with just 20 percent of mortgage holders spending more than 30 percent of their income on housing.
A traditional rule in analyzing family budgeting is that spending more than 30 percent of income on housing is a sign of being cost-burdened.