Only 12% Of Teachers Can Afford Homes Close To Their Schools

The number of teachers who can afford a reasonably priced home in their school district nationwide has collapsed to just 12%, down from 17% last summer and 30% in 2019, amid the worst housing affordability crisis in a generation, according to data from Redfin.

Redfin’s analysis of median teacher salaries for 2022 across 50 major cities for over 70,000 PreK-12 public and private schools revealed no teacher in San Jose and San Diego could afford homes within “commuting distances” to their respective school, which means home and work are 20 minutes during typical rush hour conditions.

The struggle stems from teacher wages not keeping pace with high inflation. Data from National Education Association (NEA) shows teachers only received a 2% bump in pay in 2021-22 from the prior year to $66,745 when adjusted for inflation. Compared with a decade ago, teachers make $3,644 less when adjusted for inflation.

“As teacher salaries stagnate, housing prices continue to climb—a confluence of events that has forced many educators to drop out of the field, fueling a dire teacher shortage in some areas,” the report said.

A recent Redfin report shows the typical homebuyer’s monthly mortgage payment was $2,605 during the four weeks ending July 30, up 19% from a year earlier. Rent prices are also near record highs.

“The shortage of affordable homes is exacerbating the shortage of teachers,” said Redfin Senior Economist Sheharyar Bokhari.

Bokhari continued, “Many teachers who can’t afford to buy a house near work are either renting and missing out on the opportunity to build wealth through home equity, or leaving education in search of more lucrative careers.”

The worst of the housing affordability crisis is for teachers in Democratically controlled metro areas.

Redfin does have some good news: The most affordable place for teachers is the Midwest…

In Detroit, the average teacher can afford two-thirds (67%) of homes for sale within commuting distance of their school—the highest share among the 50 most populous metros. Next comes Cleveland, where 59% of commutable homes, on average, are affordable on the median teacher salary. Rounding out the top five are Pittsburgh (53%), Philadelphia (49%) and St. Louis (40%).

The list is similar for rentals. Ranking first is Cleveland, where the typical teacher can afford 82% of available rentals within commuting distance of their school. It’s followed by Pittsburgh (76%), Detroit (73%), Milwaukee (73%) and Philadelphia (62%).

These metros have a couple of things in common: They rank among the most affordable when it comes to home prices, and they don’t rank at the bottom of the list when it comes to teacher salaries. That’s why these areas have relatively high shares of homes affordable for teachers.

In Detroit, for example, the median home sale price is $187,000—lower than any other major metro in the country. Still, Detroit ranks 26th for teacher pay among the 50 biggest metros, with a median salary of $64,221. That’s higher than the typical salary in, say, Miami, where the median home sale price is $515,000 but the typical teacher only makes $60,463.

In a separate report, Senior Macro Strategist at Rabobank Benjamin Picton explained how no matter how millennials and Gen Z save, their ability to afford a home has collapsed.

Just wait until student debt repayments restart in the next few weeks. The NEA said about half of all teachers have an average total student debt of around $56,000.

Source: ZeroHedge

Image: Pixabay

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