New York, NY: – (RealEstateRama) — According to a new report, becoming a homeowner in New York City’s real estate market is a considerable challenge for the vast majority of New York City households—including those earning up to six figures—due to the city’s severely constrained supply of affordable home-buying opportunities. And homeownership prospects do not necessarily improve by moving out of the city to the surrounding New York suburbs.
The newly-released NYU Furman Center / Citi Report on Homeownership & Opportunity in New York City highlights the unique elements of the homeownership market in New York City by analyzing recent home sales data and examining the potential purchasing power of households at various income levels in New York City, as well as the nearby counties of Nassau, Suffolk, and Westchester.
The study finds that the purchasing power of most New York City households is extremely limited. While roughly half of the city’s households (51%) earn $55,000 or less annually, they could afford just 9% of 2014 home sales. Even households earning up to $114,000 annually could only afford 42% of home sales in New York City. Only 22% of the city’s population earned upwards of $114,000 in 2014.
“Since 1990, incomes have stagnated while the costs of housing—both rental housing and home sales prices—have skyrocketed,” said Mark Willis, Senior Policy Fellow at the NYU Furman Center and co-author of the study. “As a result, there are not enough homes available for purchase at prices affordable to the vast majority of New Yorkers.”
In New York City, just one-third of households own their home, which is the inverse of the U.S. homeownership rate of roughly 66%. But while New York City had a relatively low share of homeowners compared to the U.S. in 2014, it was disproportionately low for households earning up to $55,000.
“This report highlights the stark realities facing potential homeowners in New York City and its surrounding counties,” said Bob Annibale, Global Director of Citi Community Development and Inclusive Finance. “In order to respond effectively to the uniquely complex and competitive housing market of the greater New York City area, this new research suggests that we must continue to work across sectors on bold new solutions that ensure all New Yorkers have access to housing that is both safe and affordable – as well as the opportunities to build wealth and assets over the long term.”
According to the study, moving out of New York City to the nearby NY suburbs does not necessarily improve a New York City household’s home-buying prospects. Westchester County had an even smaller share of affordable home-buying options than New York City; there, only 2% of 2014 sales were affordable to households earning up to $55,000 annually. These same households could afford only about 25% of 2014 sales in Nassau County and 43% of 2014 sales in Suffolk County.
About the NYU Furman Center
The NYU Furman Center advances research and debate on housing, neighborhoods, and urban policy. Established in 1995, it is a joint center of the New York University School of Law and the Wagner Graduate School of Public Service. More information can be found at furmancenter.org and @FurmanCenterNYU.
About Citi
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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Source: Furman Center
