Home | Newsletter | Advertise

DC Homeowners Spend 32 Percent of Income on Mortgages

  • March 14th 2018

by Nena Perry-Brown

✉️ Want to forward this article? Click here.

 

DC Homeowners Spend 32 Percent of Income on Mortgages: Figure 1
Housing affordability in the DC metro area

A new study by Zillow shows that homeowners in the DC area spent 17.8 percent of their income on their mortgages in the fourth quarter of 2017. Historically (from 1985 to 2000), that percentage was notably higher at 22.3 percent, but rising interest rates could be moving the region back to percentages that high. 

DC Homeowners Spend 32 Percent of Income on Mortgages: Figure 2
Affordability of owning vs. renting in the DC metro area

Zillow's analysis predicts that once mortgage rates hit 5 percent, homebuyers will spend 20.2 percent of their income on their monthly mortgage. If rates were to rise as high as 7 percent, homebuyers will be spending 25.1 percent of their income on mortgages — nearly as much as area renters currently spend on housing (25.9 percent).

DC Homeowners Spend 32 Percent of Income on Mortgages: Figure 3
Percent of income spent on mortgage in area cities

In DC proper, homeowners are already spending a significant chunk of their income on home payments, jumping from 29.9 percent in 2015 to 32.5 percent at the end of last year.

The study assumes that homeowners earn the area median income and own a median-priced house with a 20 percent down-payment on a 30-year, fixed-rate mortgage.

See other articles related to: affordability, mortgage rates, mortgages, zillow

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/rising-mortgage-rates-threaten-to-make-owning-as-expensive-as-renting/13696.

Pipeline: New Condos & Apartments Coming to the DC Area

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!

First-Timer Primers

Intro guides for first-time home buyers

Red Flags Revealed During a Home Inspection Top 5 Tax Breaks For Homeowners Tax Relief for DC Homeowners
Condo Fee Tutorial What is a Rent Back? 10 Ways To Tell If a Home Renovation is Well Done
Obtaining a Basic Business License For Your Rental What is an Adjustable Rate Mortgage? The Splitting the Rent Formula
How Much Cash Do You Need to Buy a House? Is This Condo Building Financially Healthy? Interest Rates and Mortgage Points
The Scoop on Mortgage Insurance

Unique Spaces

Awesome and unusual real estate from across the DC Metro

The Most Intriguing Loft in DC The R Street Firehouse DC’s One-Room House
Dupont Circle’s Old Frat House To Become Alley Home Best Transition From a Garage To a Home The Roundhouse
Tilden Gardens Restaurant-Turned-Home Hits Market Next Week Logan Circle’s Most Intriguing Garage Frank Lloyd Wright Goes Green in Kensington
Sears Bungalow Gets a Modern Makeover Old Town General Store Becomes Three-Level Home Making the Most of a Skinny House
A Studio 27 Renovation on Capitol Hill Once a Carriage House, Now a Home The Bank that Became a Home
From Pie to Hooch to Heroin to Home The Live-Aboards of Gangplank Marina A Treehouse with Rock Creek Park As A Backyard
Modern Tranquility in Sperryville Saddle Up For Stable Living Throwing a Curve at 550 Square Feet
A Modern Hilltop Retreat Tilden Street Restaurant Becomes Spacious Home Focus on Design: A Vastu Unit at 22 West
The DC Area’s First Net Zero Home A Yankee Goes Green DC’s First Carbon Neutral Home
Eco-Friendly Alley House Off H Street The Gym, The Stables and The Firehouse