18 Jun The End of the American Dream? The Increasing Difficulty of Buying a Home and How This Relates to the Workforce
The End of the American Dream?
The Increasing Difficulty of Buying a Home and How This Relates to the Workforce
Homeownership in the U.S. has long been a cornerstone of wealth building, driven by the appreciation of property values and the steady accumulation of equity. For American families, homeownership has been the primary source of wealth, a critical tool for upward mobility, and what many consider, part of the “American Dream”.
84% of Americans say owning a home is part of their dream.
In recognition of June as National Homeownership Month, we will discuss some of the metrics illustrating the increasing difficulty of purchasing a home in Mecklenburg County and explore how this relates to the workforce.
Homeownership in Mecklenburg County Becoming More Difficult
It’s evident to anyone paying attention that purchasing a home has become harder. Consider these statistics:
- The median home value* in Mecklenburg County rose from $278,500 in 2019 to $407,500 in 2022. Using these values and assuming a 20% downpayment, the annual income needed to be approved for a home loan almost doubles from $47,600 in 2019 to $90,000 in 2022.
- Average mortgage interest rates increased from 3.94% in 2019 to 6.81% in 2022. Using the median home values and assuming a 20% downpayment, monthly mortgage payments have more than doubled since 2019, from $1,056/month to $2,149/month.
- Renters in Mecklenburg County spent 9% of their income on housing costs* in 2019, this increased to 31.6% in 2022.
As home values and interest rates climb, the required amount for purchasing and maintaining a home also increases. A 20% down payment on a median-priced home in 2019 was $55,700, which jumped to $81,500 by 2022. Concurrently, rising rent consumes more of people’s income, leaving less to save for a down payment. This situation makes the dream of homeownership feel unattainable for many. But what does this have to do with the workforce?
51% of Americans worry they will never be able to own a home.
How Does This Relate to the Workforce?
A recent study by JW Surety Bonds highlights the importance of these benefits to workers:
Employee Views:
- 1 in 4 would switch jobs for housing benefits.
- Nearly 1 in 3 value housing benefits over a raise.
- More than 2 in 5 would switch career fields for housing benefits.
- More than 2 in 5 would give up some PTO for housing benefits, with over 1 in 4 willing to give up 10 to 15 days.
Employer Views:
Employees aren’t the only people thinking of homeowner assistance benefits. Of the employers surveyed, 1 in 4 are considering offering housing benefits. These are the top reasons they are considering it:
- Enhancing employee well-being
- Attracting new talent
- Retaining talent
- Supporting employee financial stability
- Increasing employee productivity
How Are Employers Helping?
Because there are many aspects to purchasing a home, there are different ways employers can assist. Some of the tools employers are using to assist their employees are:
- Credit counseling
- Downpayment assistance
- Assistance finding and paying for real estate professionals
- Homeowner education counseling
Final Thoughts
Purchasing a home is becoming increasingly difficult due to rising home values and interest rates, compounded by higher rental costs consuming a larger share of income. Many employees strongly desire employer-provided home assistance benefits, with a significant number willing to switch jobs or career fields for such support. Recognizing this need, some employers are already offering or considering offering home-buying assistance benefits, highlighting the potential for these programs to enhance employee retention and satisfaction. In this evolving economic landscape, considering homeowner benefits among the various options provided can be a creative approach to attracting and retaining talent.
*Source: 2019 and 2022 American Community Survey
Ryan Nelson
Data Analyst
Charlotte Works