Unveil an Online, Interactive NJ Specific Paycheck to Paycheck Database

NJAR PRESS RELEASE:
EDISON — The New Jersey Association of REALTORS® (NJAR®) Governmental Research Foundation (GRF) today unveiled an online, interactive database prepared by the nationally recognized Center for Housing Policy that compares wages for selected occupations with the costs of owning and renting a home. The purpose of the New Jersey specific Paycheck to Paycheck database is to examine housing affordability around the state.
“Paycheck to Paycheck is a tremendous way for consumers to analyze the affordability of various housing options throughout the Garden State,” said 2009 NJAR® GRF President Bill Hanley. “Beyond providing a tool for the public to examine their individual housing opportunities, this database is an excellent platform to draw attention to the importance of providing more people with safe and affordable housing. Everyday, REALTORS® see firsthand the frustration and discouragement of working families unable to realize their dream of homeownership. This database is another way REALTORS® are working to shed light on some of the housing issues facing New Jersey.”
Paycheck to Paycheck provides custom charts examining the affordability of homes in all 21 counties in New Jersey for workers in 29 different occupations. Paycheck to Paycheck uses a common set of data applied in a consistent way to examine housing affordability. Users can compare one occupation across three counties or up to ten occupations in a single county. If no occupations are selected, Paycheck to Paycheck analyzes the following default set of occupations: teacher, police officer, registered nurse, retail sales worker, and janitor. To view the database, visit www.njar.com/paycheck2paycheck.
“As home prices continue to level off, the buying power for many potential homeowners has certainly increased,” added Hanley. “However, certain segments of our state’s workforce still find it difficult to afford to enter the housing market. For areas like New Jersey where home prices are higher than other parts of the country, we need to be vigilant in our efforts to create affordable housing opportunities for all of our residents.”
Findings
Bergen County is the most expensive homeownership market in the state, with a median home price of $481,250. Salem County is the least expensive area to purchase a home, with a median home price of $147,500. Hunterdon, Middlesex and Somerset Counties ranked as the most expensive rental markets in the state, with a fair market rent for a two-bedroom apartment coming in at $1,340. Fair market rent for a two-bedroom apartment in Cape May County is $895, making it the least expensive rental market in New Jersey.
Additionally, the data indicates a household would need to have a yearly income of $155,989 to afford to purchase a home in Bergen County, while in Salem County a household would need to earn $54,026 to buy a house. In Hunterdon, Middlesex and Somerset Counties a yearly income of $53,600 is needed to rent a two-bedroom apartment. A household would need to earn $35,800 annually to afford to rent a two-bedroom apartment in Cape May County.
Examining specific occupations used in the database shows that janitors and retail sales workers are priced out of every housing market in New Jersey. In addition, a two-income household is needed for a retail sales worker or a janitor to afford to enter the rental market. For teachers, police officers and nurses, counties in southern New Jersey provide more affordable housing options. There are several counties where households with two teachers, police officers or nurses could afford to purchase a home, including Burlington, Camden and Gloucester Counties. According to the database, teachers, police officers and nurses generally can afford New Jersey’s rental markets.
To calculate homeownership affordability, Paycheck to Paycheck follows conventional mortgage underwriting guidelines and assumes that not more than 28 percent of household income should be used to pay the mortgage, property taxes and insurance. The database further assumes a down payment of 10 percent.