Percentage Of Income Going To Housing Much Better In Middle TN Than Nation

Compared with the rest of the country, Nashville homes remain in line with the region’s median income. Credit: Gary McNinch/Flickr Creative Commons

The median family in Middle Tennessee pays less of their income on mortgage payments than the country overall.

According to figures from Case-Shiller, the median family in Middle Tennessee (including Nashville and 13 counties surrounding it) currently earns around $67,000. Overall, paying a monthly mortgage eats up about 11 percent of that. The national median is roughly 15 percent — that’s not including insurance and taxes.

David Stiff, an economist with Case-Shiller, said the reason is because homes in the broad Nashville area are relatively cheap. For instance, the median sale price the first quarter of this year was $160,000. The U.S. median was $203,000.

Stiff said another contributing factor is how much smaller Nashville’s home price bubble was, compared to the rest of the country. According to the numbers, which Case-Shiller sourced from the National Association of Realtors and Freddie Mac, in the last quarter of 2005, the U.S.’s median sale price was $205,000. The Nashville area, meanwhile, hit a peak mid-2007, when the median sales price was $166,000.

“It’s sort of unique because during this last housing bubble, very few market maintained that stability and Nashville was one of them,” Stiff said.

Because Middle Tennessee didn’t get caught up in the housing bubble as badly as other places, the crash wasn’t as dramatic. As a result, prices never got far out of line with income.

“The good thing about a market like Nashville is that home prices tend to grow with income levels,” Stiff said. “So there doesn’t tend to be this boom-and-bust cycle.”

Generally, experts say spending more than 30 percent of income on housing cost is considered being “cost burdened.” While the median is no where near that in Nashville area counties, San Francisco, Honolulu and Los Angeles are all places where the median household is spending at least a third of their income on mortgage payments, Stiff said.

When it comes to earnings, the Nashville area has been, for the most part, dovetailing the the country’s trend pattern. But recently, it’s been slightly outpacing the national number: $65,000 median household income, compared to Middle Tennessee’s $67,000.