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Report: More Than Half of New York City Homes Unaffordable to the Majority of Households, Including Those Earning Over $100,000

August 5, 2016
Media Contacts: 

NYU Furman Center
Shannon Moriarty
FOR IMMEDIATE RELEASE FRIDAY, AUGUST 5, 2016

Report: More Than Half of New York City Homes Unaffordable to the Majority of Households, Including Those Earning Over $100,000

NYU Furman Center and Citi report examines the home-buying potential for households at various income levels in New York City and surrounding counties
New York, NY: According to a new report, becoming a homeowner in New York City’s real estate market is a considerable challenge for the vast majority of New York City households—including those earning up to six figures—due to the city’s severely constrained supply of affordable home-buying opportunities. And homeownership prospects do not necessarily improve by moving out of the city to the surrounding New York suburbs.

The newly-released NYU Furman Center / Citi Report on Homeownership & Opportunity in New York City highlights the unique elements of the homeownership market in New York City by analyzing recent home sales data and examining the potential purchasing power of households at various income levels in New York City, as well as the nearby counties of Nassau, Suffolk, and Westchester.

The study finds that the purchasing power of most New York City households is extremely limited. While roughly half of the city’s households (51%) earn $55,000 or less annually, they could afford just 9% of 2014 home sales. Even households earning up to $114,000 annually could only afford 42% of home sales in New York City. Only 22% of the city’s population earned upwards of $114,000 in 2014.

“Since 1990, incomes have stagnated while the costs of housing—both rental housing and home sales prices—have skyrocketed,” said Mark Willis, Senior Policy Fellow at the NYU Furman Center and co-author of the study. “As a result, there are not enough homes available for purchase at prices affordable to the vast majority of New Yorkers.”

In New York City, just one-third of households own their home, which is the inverse of the U.S. homeownership rate of roughly 66%. But while New York City had a relatively low share of homeowners compared to the U.S. in 2014, it was disproportionately low for households earning up to $55,000.

“This report highlights the stark realities facing potential homeowners in New York City and its surrounding counties,” said Bob Annibale, Global Director of Citi Community Development and Inclusive Finance. “In order to respond effectively to the uniquely complex and competitive housing market of the greater New York City area, this new research suggests that we must continue to work across sectors on bold new solutions that ensure all New Yorkers have access to housing that is both safe and affordable – as well as the opportunities to build wealth and assets over the long term.”

According to the study, moving out of New York City to the nearby NY suburbs does not necessarily improve a New York City household’s home-buying prospects. Westchester County had an even smaller share of affordable home-buying options than New York City; there, only 2% of 2014 sales were affordable to households earning up to $55,000 annually. These same households could afford only about 25% of 2014 sales in Nassau County and 43% of 2014 sales in Suffolk County.

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REPORT URL:  http://furmancenter.org/homeo wnershipopportunityNYC

MEDIA CONTACTS:
Shannon Moriarty (NYU Furman Center), shannon.moriarty@nyu.edu, 212-998-6492
Elizabeth Patella (Citi), elizabeth.patella@citi.com, 212-559-2477

WEBINAR BRIEFING: NYU Furman Center researchers will present findings from the NYU Furman Center / Citi Report on Homeownership & Opportunity in New York City on Friday, September 9th from 1:00-2:00 p.m. EDT. Register >>

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KEY FINDINGS

The majority of sales in New York City in 2014 were too expensive for the vast majority of New York City households. Households earning up to $114,000 (comprising 77% of New York City households) could only afford 42% of 2014 home sales in New York City. Households earning to $83,000 annually (comprising 66% of New York City households) could only afford 22% of 2014 sales in New York City.

New York City’s homeownership rate is less than half that of the U.S. and less than a third of New York City households (31%) owned a home in 2014—the inverse of the U.S. homeownership rate (63%) of almost two-thirds.

Homeownership rates vary dramatically across the city’s five boroughs. The homeownership rate in Staten Island exceeded that of the U.S. with a rate of 68 percent in 2014—five percentage points higher than the national homeownership rate. However, the homeownership rate in the Bronx was only 18 percent—the second-lowest of any county in the U.S.

New York City homeowners had higher incomes than the typical New York City household and had higher incomes than homeowners nationwide in 2014. The median owner household in New York City earned just over $86,000 in 2014, 63 percent more than the overall median New York City household ($53,063) and 26 percent more than owner households nationwide.

New York City had far lower rates of homeownership among households earning up to $55,000 than the U.S. in 2014. In 2014, just over half (58%) of households earning up to $55,000 in the U.S. owned their homes. Among these households in New York City, homeownership rates were far lower; only 25 percent of households earning up to $55,000 annually in New York City owned their homes in 2014.

The New York City real estate market is expensive; the median city sales price is only affordable to high-income households. In 2014, there were over 33,000 home purchases in New York City with a median sales price of $575,700. The median sales price in Manhattan was over twice as high at $1,301,600 than the city median, and sales under $500,000 were concentrated outside of Manhattan.

Home sales under $500,000 in New York City were largely concentrated outside of Manhattan. The relatively few 2014 sales affordable to households earning up to $55,000 annually were clustered in eastern Queens, the north Bronx, and the north shore of Staten Island.

Of the sales affordable to households earning up to up to $34,000 annually, a large share (37%) were condominiums. Among the properties sold in New York City in 2014 that were affordable to households earning up to $34,000 annually, 37% were condominium units, making them as common as single-family homes at that price level.

Westchester County is less affordable to NYC households than New York City; only 18% of 2014 home sales were affordable to households earning up to $114,000. The vast majority of sales prices in Westchester County in 2014—about 82%—were affordable only to NYC households earning above $114,000.

Homeownership prospects for NYC households earning up to $114,000 annually are better in Nassau County than New York City. Households earning up to $114,000 annually could afford 56% of home sales in 2014—more than the 42% of 2014 sales in New York City. Only about 6% of sales were affordable to NYC households earning up to $55,000 in 2014, and an additional 18% of sales were affordable to households earning between $55,000-83,000.

Suffolk County offered the most affordable home purchase options for households at all income levels, where a majority of sales in 2014 (66%) were affordable to all New York City households. In Suffolk County, while only 6% of sales in 2014 were affordable to NYC households earning up to $34,000, 16% of sales were affordable to NYC households earning up to $55,000, and 42% of sales were affordable to NYC households earning up to $83,000—higher percentages than any other geography in this study.

About the NYU Furman Center
The NYU Furman Center advances research and debate on housing, neighborhoods, and urban policy. Established in 1995, it is a joint center of the New York University School of Law and the Wagner Graduate School of Public Service. More information can be found at furmancenter.org and@FurmanCenterNYU.

About Citi
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube:www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn:www.linkedin.com/company/citi

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One Comment
  1. Does anyone know how to fix the formatting?

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