SEATTLE, April 9, 2018 /PRNewswire/ -- Home values
have been appreciating more per working hour than local minimum
wage pays in about half of the nation's 50 largest cities,
according to a new Zillow® analysisi.
The typical U.S. homeowner is gaining $7.09 of equity in their home every hour they're
at the officeii, slightly less than the federal minimum
wage of $7.25.
But homeowners in 24 of the 50 largest U.S. cities are in a much
more favorable position, especially those in the booming tech towns
of San Jose, Calif., San Francisco and Seattle.
In San Jose, the typical
homeowner is gaining $99.81 of equity
in their home every working-houriii, but minimum wage in
the city is just $13.50. That means
the typical home in San Jose is
"earning" over seven times local minimum wage. Even still, the
average hourly wage in the San
Jose metro is $43.71, which is
over two times less than local home value appreciation per
working-hour.
While homeownership is widely viewed as a good way to accumulate
wealth, many renters are struggling to come up with enough money
for a down payment to break into the market. Median rent across the
U.S. is about 3 percent higher than it was a year ago, making it
increasingly difficult for renters to save. On top of that, home
values are up 8 percent annually, which means the amount needed for
a down payment is a continually rising target.
"As home values continue to rise at a rapid clip, many
homeowners have earned more in home equity over the past year than
they would have by working a minimum wage job – and in some areas,
more than they'd have earned even if they had a job paying a
six-figure annual salary," said Zillow senior economist
Aaron Terrazas. "But equity
'earnings' are a lot different than the salary typically taken home
on the first and fifteenth of each month; it is not money that
accumulates directly into a checking account or that can be spent
on daily needs. Equity is only available once a homeowner chooses
to sell a home, and even then is often subject to various taxes and
other expenses. Still, particularly for homeowners that have
already or are very close to paying off a mortgage, this
supplemental 'income' – especially if allowed to accumulate over
several years – can essentially serve as a kind of second job that
pays directly to a homeowner's bottom line, without nearly as much
actual work involved in collecting it."
Home values have been appreciating in San Francisco at a rate more than four times
the city's minimum wage, and in Seattle, which has the highest minimum wage
among all cities analyzed at $15 per
hour, the typical homeowner is gaining $54.24 of equity per working-hour.
A home is often a person's biggest financial investment, and
according to the 2017 Zillow Group Consumer Housing Trends Report,
the typical American homeowner has 40 percent of their wealth tied
up in their home. A recent Zillow survey found that 70 percent of
Americansiv view their home as a positive long-term
investment.
Homeowners on the West Coast aren't the only ones benefiting
from a hot housing market. Home values in New York, Las
Vegas, Honolulu and
Nashville have been appreciating
over $6 more per working-hour than
the city's minimum-wage earners make.
In some parts of the country, where home value appreciation is
slower, local minimum wage is $10 or
more higher than the hourly pace of home value appreciation. In
Washington D.C., minimum wage is
$12.50 per hour, but home values have
been appreciating just $1.53 per
working-hour. A similar trend holds true in Chicago and Portland.
City
|
Zillow Home Value
Index (ZHVI)
|
ZHVI $ Increase
Over Past Year
|
ZHVI Increase Per
Working-Hour
|
Minimum
Wagev
|
United
States
|
$
210,200
|
$
14,800
|
$
7.09
|
$
7.25
|
New York
|
$
721,100
|
$
88,000
|
$
42.17
|
$
13.00
|
Los
Angeles
|
$
671,000
|
$
55,000
|
$
26.35
|
$
12.00
|
Chicago
|
$
220,900
|
$
2,100
|
$
1.01
|
$
11.00
|
Philadelphia
|
$
147,200
|
$
12,600
|
$
6.04
|
$
7.25
|
Phoenix
|
$
227,300
|
$
19,500
|
$
9.34
|
$
10.50
|
Las Vegas
|
$
247,700
|
$
35,200
|
$
16.87
|
$
8.25
|
San Diego
|
$
618,200
|
$
64,400
|
$
30.86
|
$
11.50
|
Dallas
|
$
178,600
|
$
16,100
|
$
7.71
|
$
7.25
|
San Jose
|
$
1,078,300
|
$
208,300
|
$
99.81
|
$
13.50
|
Jacksonville
|
$
166,100
|
$
19,700
|
$
9.44
|
$
8.10
|
San
Francisco
|
$
1,289,300
|
$
125,500
|
$
60.13
|
$
14.00
|
Austin
|
$
337,600
|
$
24,500
|
$
11.74
|
$
7.25
|
Detroit
|
$
44,600
|
$
6,200
|
$
2.97
|
$
9.25
|
Columbus
|
$
140,400
|
$
12,400
|
$
5.94
|
$
8.15
|
Memphis
|
$
84,200
|
$
4,800
|
$
2.30
|
$
7.25
|
Charlotte
|
$
203,600
|
$
23,100
|
$
11.07
|
$
7.25
|
El Paso
|
$
115,700
|
$
1,900
|
$
0.91
|
$
7.25
|
Boston
|
$
569,500
|
$
35,300
|
$
16.91
|
$
11.00
|
Seattle
|
$
740,700
|
$
113,200
|
$
54.24
|
$
15.00
|
Baltimore
|
$
125,500
|
$
4,200
|
$
2.01
|
$
9.25
|
Denver
|
$
407,100
|
$
33,200
|
$
15.91
|
$
10.20
|
Washington
|
$
553,600
|
$
3,200
|
$
1.53
|
$
12.50
|
Nashville
|
$
250,200
|
$
28,200
|
$
13.51
|
$
7.25
|
Milwaukee
|
$
112,500
|
$
8,800
|
$
4.22
|
$
7.25
|
Tucson
|
$
174,700
|
$
13,400
|
$
6.42
|
$
10.50
|
Portland
|
$
413,300
|
$
2,700
|
$
1.29
|
$
11.25
|
Oklahoma
City
|
$
131,900
|
$
(2,700)
|
$
(1.29)
|
$
7.25
|
Omaha
|
$
162,800
|
$
12,300
|
$
5.89
|
$
9.00
|
Albuquerque
|
$
189,800
|
$
3,600
|
$
1.72
|
$
8.80
|
Fresno
|
$
228,700
|
$
21,700
|
$
10.40
|
$
11.00
|
Sacramento
|
$
323,700
|
$
32,600
|
$
15.62
|
$
11.00
|
Mesa
|
$
234,800
|
$
16,200
|
$
7.76
|
$
10.50
|
Long Beach
|
$
583,000
|
$
38,900
|
$
18.64
|
$
11.00
|
Kansas
City
|
$
128,300
|
$
9,800
|
$
4.70
|
$
7.25
|
Virginia
Beach
|
$
260,400
|
$
6,100
|
$
2.92
|
$
7.25
|
Colorado
Springs
|
$
272,700
|
$
27,600
|
$
13.22
|
$
10.20
|
Atlanta
|
$
225,800
|
$
20,900
|
$
10.01
|
$
7.25
|
Miami
|
$
312,700
|
$
11,900
|
$
5.70
|
$
8.25
|
Oakland
|
$
755,600
|
$
80,500
|
$
38.57
|
$
13.23
|
Tulsa
|
$
116,800
|
$
5,300
|
$
2.54
|
$
7.25
|
Cleveland
|
$
61,700
|
$
5,700
|
$
2.73
|
$
8.15
|
Honolulu
|
$
702,100
|
$
36,400
|
$
17.44
|
$
10.10
|
Minneapolis
|
$
248,000
|
$
17,200
|
$
8.24
|
$
10.00
|
Baton
Rouge
|
$
171,600
|
$
16,500
|
$
7.91
|
$
7.25
|
New
Orleans
|
$
172,700
|
$
(1,700)
|
$
(0.81)
|
$
7.25
|
Arlington
|
$
190,900
|
$
16,800
|
$
8.05
|
$
7.25
|
Raleigh
|
$
230,900
|
$
13,200
|
$
6.32
|
$
7.25
|
Wichita
|
$
125,200
|
$
4,000
|
$
1.92
|
$
7.25
|
Tampa
|
$
201,300
|
$
20,400
|
$
9.77
|
$
8.10
|
Anaheim
|
$
590,800
|
$
30,200
|
$
14.47
|
$
11.00
|
Zillow
Zillow is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Launched in 2006, Zillow
is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
i Zillow analyzed home value appreciation over the
past year among the 50 largest U.S. metros to see how much home
values have appreciated per working-hour.
ii Assuming an eight-hour work day. This equates to
2,087 working hours in a year, according to OPM.GOV.
iii A working-hour is referring to time spent at work,
with 2,087 working hours in a year.
iv According to the September
2017 Zillow Housing Aspirations Report, 70 percent of
respondents said owning a home is either an excellent or good
long-term investment.
v Minimum wage data from Paywizard.org.
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SOURCE Zillow