County’s proportion of income spent on home costs is among lowest in state, report says
A national real estate and housing data analytics service reports Imperial County residents pay the third lowest proportion of their income on home ownership costs in the state.
New York-based Gavop. com said in a release that data shows homeowners who live in Imperial County allocated 32 percent of their income toward housing costs in 2016.
Gavop used data collected by the U.S. Census Bureau to produce a study on homeowners’ costs as a percentage of income. The study analyzed real estate trends at the county level across the United States and found that Imperial County had a median income of $49,095 and a median housing cost of $15,876 per year for those with a mortgage. The 32 percent of income spent on housing costs is the proportion of income allocated to homeowner expenses including the sum of mortgage payments, real estate taxes, insurance and utilities.
The county’s median housing cost in relation to income is less than California’s rate of 39 percent but higher than the national level of 31 percent. Additionally, Imperial County’s relatively low allocation of income to housing costs is influenced by the county’s below-average annual housing cost of $15,876 compared to the national value of $17,832 and the state’s value of $26,256.
The percentage of income paid towards homeownership costs is a way to measure the level of debt one has to real estate expenses, Gavop’s release said. Most banks use a measurement called “debit income ratios” when approving loans. In other words, it is a ratio of monthly debt payments divided by one’s gross monthly income. This analysis uses median income, home value, and median homeowner cost with a mortgage to replicate a similar debt ratio on the county level.
“In this study, we looked at annual housing costs as a percentage to gauge how much debt people owe to their living situation based on location,” said Gavop analyst Kevin Pryor. “Here, the numbers show that Imperial County residents had a median percentage of under 1/3 of their income spent on housing costs, resulting in a small debt to homeownership in the area.”