Housing Affordability Outlook is Encouraging for Military Households

Rent and mortgages are more affordable for active-duty military and veteran households than the average household in all but three metros, and homes are more affordable to veteran households in all major metros

- The typical U.S. household would spend a significantly greater share of its income on market rent and typical mortgage payments than both active duty and veteran households.

- The share spent on mortgage payments is even lower for the majority of military homeowners who secure VA loans, which typically have more favorable rates.

- Only in Seattle, San Diego and Portland would active-duty households spend a greater share of income on housing than the local population at large.

News provided by

Zillow, Inc.

Nov 06, 2019, 08:00 ET

SEATTLE, Nov. 6, 2019 /PRNewswire/ -- Active-duty military and veteran households are, on average, better able to afford housing than a typical U.S. household, according to a new Zillow® analysis.

Nationally, it would take 29.6% of the typical household income to pay the median rent – just below the 30% rule of thumb for affordable housing. Active-duty military households would spend 24.9% of their income on that median rent, while a typical household with one or more veterans would spend 20.1%.

The results are similar for homeowners. The typical household in the U.S. would spend 16% of its income on a mortgage payment for the median home, while active-duty military households would spend 13.4% and veterans would spend 10.9%ⁱ.

Improving the picture further are Veterans Affairs (VA) loans, which are available to military members and their families. VA loans typically offer lower rates, have more lenient credit requirements and do not require private mortgage insurance. About 77% of active-duty homeowners and 58% of veteran homeowners use VA loansⁱⁱ, which take the share of income spent on mortgage payments down to 12.6% for active-duty households and 10.2% for veterans.

"At a time when housing affordability is a real issue for so many, including public servants like teachers and fire fighters, the outlook is encouraging in much of the country for current and former service members and their families," said Zillow Group Economist Joshua Clark. "Taking advantage of benefits like VA loans can really pay off as well. At current rates, a home buyer would save about $20,000 over the life of a loan on a typical home – and that's before factoring in other benefits of VA loans such as not always requiring a down payment and limits on closing costs."

There are only a few large metro areas where active-duty households have more difficulty affording housing than the population at large. Active-duty households in Seattle, San Diego and Portland typically spend a greater share of their income on mortgage and rent payments than the rest of the metro.

Military households in Florida enjoy the greatest relative affordability compared to their non-military neighbors. The gap in share of income spent on rent between active-duty households and the rest of the population is larger in Miami (15 percentage points), Orlando (11.7) and Tampa (11.3) than any other large U.S. metros.

Veteran homeowners and renters are typically better able to afford housing than non-veterans in each of the 35 largest metro areas in the U.S. Veterans in San Diego have one of the biggest advantages over non-veterans in both rent and mortgage affordability, despite active-duty households in San Diego being worse off than non-military households. This suggests that veterans are often able to transition into higher-paying jobs there once they have completed their military service.

Despite the relative advantage over the general population, the typical rent is still unaffordable for active-duty households in six of the 35 largest metros in the U.S., using the 30% standard. Mortgages are only unaffordable for active-duty military and veteran households in San Jose, the most expensive housing market in the country.

Rent Affordability for Military Households
Metropolitan Area	Median Rent	All Households - Share of Income on Median Rent	Veteran Households - Share of Income on Median Rent	Active-Duty Households - Share of Income on Median Rent
United States	$1,579	29.6%	20.1%	24.9%
New York, NY	$2,271	33.9%	22.0%	29.5%
Los Angeles-Long Beach-Anaheim, CA	$2,591	41.9%	27.0%	35.1%
Chicago, IL	$1,598	26.5%	18.3%	23.6%
Dallas-Fort Worth, TX	$1,432	24.3%	16.4%	22.4%
Philadelphia, PA	$1,481	24.5%	16.7%	22.9%
Houston, TX	$1,373	24.8%	15.8%	18.5%
Washington, DC	$1,950	22.4%	15.4%	20.6%
Miami-Fort Lauderdale, FL	$1,845	38.9%	22.3%	23.9%
Atlanta, GA	$1,439	25.2%	17.8%	21.6%
Boston, MA	$2,369	31.1%	21.6%	30.0%
San Francisco, CA	$3,150	34.8%	23.7%	33.9%
Detroit, MI	$1,193	23.2%	14.7%	15.1%
Riverside, CA	$1,900	34.6%	22.3%	32.2%
Phoenix, AZ	$1,380	25.4%	17.2%	24.6%
Seattle, WA	$2,005	27.7%	21.1%	35.2%
Minneapolis-St Paul, MN	$1,482	22.0%	18.2%	16.3%
San Diego, CA	$2,489	36.7%	25.8%	42.0%
St. Louis, MO	$997	18.4%	11.8%	13.8%
Tampa, FL	$1,381	30.5%	17.7%	19.1%
Baltimore, MD	$1,596	23.9%	14.1%	19.9%
Denver, CO	$1,764	26.0%	19.3%	23.2%
Pittsburgh, PA	$1,094	21.1%	15.6%	13.8%
Portland, OR	$1,636	25.6%	19.4%	27.9%
Charlotte, NC	$1,308	24.5%	16.4%	19.3%
Sacramento, CA	$1,769	29.6%	19.3%	22.9%
San Antonio, TX	$1,207	24.6%	14.8%	17.2%
Orlando, FL	$1,400	29.2%	18.3%	17.5%
Cincinnati, OH	$1,132	20.9%	13.7%	N/A
Cleveland, OH	$1,059	23.2%	14.5%	N/A
Kansas City, MO	$1,110	20.0%	14.1%	15.4%
Las Vegas, NV	$1,310	25.9%	16.3%	19.4%
Columbus, OH	$1,183	21.0%	15.6%	13.4%
Indianapolis, IN	$1,082	20.7%	15.0%	15.7%
San Jose, CA	$3,308	31.6%	25.1%	N/A
Austin, TX	$1,569	24.4%	18.0%	21.8%

Mortgage Affordability for Military Households
Metropolitan Area	Median Mortgage Payment (Standard Loan)	Median Mortgage Payment (VA Loan)	All Households - Share of Income on Median Mortgage (Standard Loan)	Veteran Households - Share of Income on Median Mortgage (VA Loan)	Active-Duty Households - Share of Income on Median Mortgage (VA Loan)
United States	$852	$797	16.0%	10.2%	12.6%
New York, NY	$1,655	$1,548	24.7%	15.0%	20.1%
Los Angeles- Long Beach- Anaheim, CA	$2,434	$2,276	39.3%	23.7%	30.8%
Chicago, IL	$845	$791	14.0%	9.1%	11.7%
Dallas-Fort Worth, TX	$907	$848	15.4%	9.7%	13.3%
Philadelphia, PA	$870	$813	14.4%	9.2%	12.6%
Houston, TX	$768	$718	13.9%	8.2%	9.7%
Washington, DC	$1,523	$1,425	17.5%	11.2%	15.0%
Miami-Fort Lauderdale, FL	$1,060	$991	22.4%	12.0%	12.8%
Atlanta, GA	$822	$768	14.4%	9.5%	11.5%
Boston, MA	$1,732	$1,620	22.8%	14.8%	20.5%
San Francisco, CA	$3,508	$3,281	38.7%	24.7%	35.3%
Detroit, MI	$608	$568	11.8%	7.0%	7.2%
Riverside, CA	$1,385	$1,295	25.2%	15.2%	21.9%
Phoenix, AZ	$997	$933	18.3%	11.6%	16.6%
Seattle, WA	$1,834	$1,715	25.3%	18.1%	30.1%
Minneapolis-St Paul, MN	$1,016	$950	15.1%	11.7%	10.5%
San Diego, CA	$2,211	$2,067	32.6%	21.4%	34.9%
St. Louis, MO	$624	$584	11.5%	6.9%	8.1%
Tampa, FL	$803	$751	17.7%	9.6%	10.4%
Baltimore, MD	$999	$935	15.0%	8.2%	11.7%
Denver, CO	$1,529	$1,430	22.6%	15.6%	18.8%
Pittsburgh, PA	$538	$503	10.4%	7.2%	6.4%
Portland, OR	$1,481	$1,385	23.2%	16.4%	23.6%
Charlotte, NC	$785	$735	14.7%	9.2%	10.8%
Sacramento, CA	$1,539	$1,439	25.8%	15.7%	18.6%
San Antonio, TX	$728	$680	14.8%	8.4%	9.7%
Orlando, FL	$895	$837	18.7%	10.9%	10.5%
Cincinnati, OH	$636	$595	11.7%	7.2%	N/A
Cleveland, OH	$547	$511	12.0%	7.0%	N/A
Kansas City, MO	$716	$669	12.9%	8.5%	9.3%
Las Vegas, NV	$1,045	$977	20.7%	12.2%	14.5%
Columbus, OH	$723	$676	12.9%	8.9%	7.7%
Indianapolis, IN	$623	$583	11.9%	8.1%	8.4%
San Jose, CA	$4,313	$4,033	41.2%	30.6%	N/A
Austin, TX	$1,165	$1,090	18.1%	12.5%	15.2%

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ⁱ Mortgage affordability calculations assume a 20% down payment and do not include other costs of owning a home such as property taxes, homeowner's insurance and common homeowner maintenance
ⁱⁱ National Association of Realtors' Veterans and Active Military Home Buyers and Sellers Profile

SOURCE Zillow, Inc.