Redfin Reports The Typical Teacher Can Afford 48% of Apartments Near Their School–Up from 41% Last Year. But They Can Afford Just 14% of Homes for Sale

Rhea-AI Summary

Redfin reports that teacher rental affordability has improved, with 47.9% of apartments near schools now affordable, up from 40.7% in 2023. This increase is attributed to a 3.8% rise in median teacher salaries to $64,266 and flattening asking rents. However, affordability remains below pre-pandemic levels of 58% in 2019.

The report highlights significant regional disparities. In Portland, OR, teachers can afford 91.3% of nearby apartments, the highest among 33 metros analyzed. Conversely, in Miami, teachers can afford only 0.2% of apartments, the lowest. For homeownership, the average teacher can afford just 14.3% of homes for sale near their school, unchanged from 2023 but down from 39.1% in 2019.

Positive

• Rental affordability for teachers improved from 40.7% to 47.9% year-over-year
• Median U.S. teacher salary increased by 3.8% to $64,266 in 2023
• In Portland, OR, teachers can afford 91.3% of nearby apartments, the highest among analyzed metros

Negative

• Teacher rental affordability remains below pre-pandemic levels of 58% in 2019
• Teachers can afford only 14.3% of homes for sale near their schools, down from 39.1% in 2019
• In Miami, teachers can afford just 0.2% of apartments near schools, the lowest among analyzed metros
• Median teacher salary in Miami fell 11.9% year-over-year to $53,297 in 2023
• Teacher employment in Miami fell 10.7% last year, more than any other metro

Insights

Real Estate Analyst

The report highlights a modest improvement in rental affordability for teachers, but it's important to note this is largely due to stagnant rent growth rather than significant salary increases. The 3.8% year-over-year increase in median teacher salaries to $64,266 is barely keeping pace with inflation, indicating continued financial pressure on educators.

The stark contrast between rental and homeownership affordability is concerning. While teachers can afford 47.9% of nearby rentals, they can only afford 14.3% of homes for sale. This disparity, coupled with the fact that teacher salaries are 5% lower than a decade ago when adjusted for inflation, points to a long-term affordability crisis in the education sector.

The geographical variations in affordability, from Portland's 91.3% to Miami's 0.2% for rentals, highlight the need for localized solutions. The decline in teacher pay in some metros, particularly Miami's 11.9% drop, is alarming and could lead to staffing challenges in affected areas.

Education Policy Expert

This report underscores the ongoing challenges in teacher compensation and retention. The marginal improvement in rental affordability is overshadowed by the persistent inability of teachers to access homeownership in most markets. This disparity can lead to increased turnover and difficulties in attracting talent to the teaching profession.

The regional variations in teacher pay and housing affordability highlight the need for targeted policy interventions. Areas like Miami and Orlando, where teachers can afford less than 7% of nearby rentals, risk severe staffing shortages. Conversely, the success of union negotiations in Portland, resulting in a 13.8% cost-of-living increase over three years, demonstrates the potential impact of collective bargaining.

Policymakers should consider innovative solutions such as teacher housing subsidies, loan forgiveness programs and partnerships with local real estate developers to create affordable housing near schools. Without addressing this issue, the quality of education and the stability of the teaching workforce remain at risk.

Financial Analyst

From an investment perspective, this report offers insights into both the real estate and education sectors. The flattening of rent growth, coupled with increased apartment construction, suggests a potential softening in the rental market. However, the slowing of apartment construction could lead to future rent increases, presenting opportunities for real estate investors in select markets.

The affordability crisis for teachers, particularly in high-cost areas, may drive demand for affordable housing developments near schools. Investors and developers focusing on this niche could find opportunities, especially if supported by government incentives or public-private partnerships.

The stark difference between rental and homeownership affordability (47.9% vs 14.3%) indicates a continued strong demand for rental properties in many areas. This trend could support investment in multi-family properties, particularly in markets with growing populations and stable or increasing teacher salaries.

Overall, while the education sector faces challenges, the real estate market shows potential for targeted investments in affordable housing and rental properties in strategic locations.

Rental affordability has improved thanks to flattening rents and a modest increase in teacher pay

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —The average teacher can afford 47.9% of apartments for rent within commuting distance of their school, up from 40.7% in 2023, thanks to a modest increase in teacher salaries combined with flattening asking rents. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Still, rental affordability for teachers remains below pre-pandemic levels; in 2019, the average teacher could afford 58% of apartments within commuting distance of their school.

That’s according to a Redfin analysis of July rental listings across 33 major U.S. metropolitan areas and median teacher salaries (K-12 public and private) as of 2023.

The median U.S. teacher salary rose 3.8% year over year to $64,266 in 2023, outpacing rents, which have come back down to earth after surging during the pandemic. Asking rents declined in 2023, and are now up just 0.4% from a year ago. Rents are sluggish because the U.S. has been building a lot of apartments, which has put a lid on rent growth, though it’s worth noting that rents could rise again in the coming years because apartment construction has started to slow.

Many teachers still struggle to find affordable rentals. Even though rent growth is muted, the median U.S. asking rent is only about $50 below its record high, and increases in teacher salaries have not kept pace with overall inflation. Teachers are making an average of 5% less than a decade ago when adjusted for inflation, according to the National Education Association (NEA), and paltry pay is driving many educators to leave the profession.

“The small improvement in housing affordability for teachers who rent is only a drop in the bucket,” said Redfin Senior Economist Sheharyar Bokhari. “Homeownership remains out of reach for a lot of educators, who, unlike many workers today, don’t have the flexibility to work remotely from somewhere more affordable. Building affordable housing near schools should be a priority for U.S. policymakers, but that’s only half the battle, as teacher salaries have faced years of underinvestment.”

In Portland, the Typical Teacher Can Afford 91% of Apartments Near School. In Miami, It’s Less Than 1%.

In Portland, OR, the average teacher can afford 91.3% of apartments within commuting distance of their school—the highest share among the 33 metros Redfin analyzed. It’s followed by Pittsburgh (83.9%), Atlanta (82%), Jacksonville, FL (80.6%) and Houston (78.8%).

Portland has some of the highest teacher pay in the country. The median teacher salary there was $95,486 as of 2023. That’s roughly $30,000 more than the national median, and is up 16% from a year earlier—the second biggest increase among the metros Redfin analyzed. The Portland Association of Teachers, a union representing public school teachers, last year negotiated a 13.8% cumulative cost-of-living increase over three years. Asking rents have also been falling in Portland; they dropped 3.8% year over year to a median of $1,799 in July.

On the other end of the spectrum is Miami, where the average teacher can afford just 0.2% of apartments within commuting distance of their school—the lowest share among the metros Redfin analyzed. It’s followed by Orlando, FL (6.7%), San Jose, CA (9.8%), Boston (15.7%) and New York (20.4%).

Teachers Pay Has Fallen in Four Metros, With Miami Posting the Biggest Decline

In Miami, the median teacher salary fell 11.9% year over year to $53,297 in 2023—the biggest decline among the top 50 metros. Only three other metros saw decreases: Kansas City, MO (-2.5%), Buffalo, NY (-1.8%) and Detroit (-0.1%).

Florida ranks 50th when it comes to educator pay by state, according to the NEA. Among the top 50 metros, Orlando has the second lowest median teacher salary ($51,611) and Miami has the fourth lowest.

Teacher employment in Miami fell 10.7% last year—more than any other metro—as some teachers left Florida and/or the profession.

The Typical Teacher Can Only Afford to Buy 14% of Homes for Sale Near Their School

The average teacher can afford 14.3% of homes for sale within commuting distance of their school, essentially unchanged from 14.4% in 2023 but down from 39.1% in 2019.

The cost of both renting and buying are near record highs, but ​​affordability is more strained in the for-sale market because prices are rising relatively quickly, mortgage rates remain elevated, and the shortage of available properties is more severe.

The median monthly mortgage payment jumped 4.7% year over year in July, compared with a sub-1% increase in asking rents. Mortgage payments were 90.7% above pre-pandemic (July 2019) levels, while asking rents were 21.4% above pre-pandemic levels.

The Rust Belt Is the Most Affordable Place for Teachers Looking to Buy a Home

In Cleveland, the average teacher can afford 61.1% of homes for sale within commuting distance of their school—the highest share among the 50 most populous metros. Next came Buffalo (53.3%), Pittsburgh (49.3%), St. Louis (39.5%) and Detroit (39.3%).

These metros have a couple of things in common: They rank among the most affordable when it comes to home prices, and they don’t rank at the bottom of the list when it comes to teacher salaries. That’s why they have relatively high shares of homes affordable for teachers.

In Cleveland, for example, the median home list price is $229,500—the lowest in the country. Still, Cleveland ranks 14th out of 50 for teacher pay, with a median salary of $80,575. That’s significantly more than the typical salary in, say, Miami, where the median list price is more than twice as high ($512,253), but the typical teacher only makes $53,297.

California Is the Least Affordable Place for Teachers Looking to Buy a Home

California is home to three of the five metros where it’s hardest for teachers to buy a home. In San Jose, the average teacher can afford 0.1% of homes for sale within commuting distance of their school. Next came Salt Lake City (0.2%), San Diego (0.4%), Los Angeles (0.8%) and Raleigh, NC (0.8%).

While California has the highest teacher salaries, it also has the highest housing costs in the country. In San Jose, for example, the median teacher salary is $100,805—the third highest among the top 50 metros, behind only San Francisco and Riverside, CA. But the typical San Jose seller lists their home for $1.4 million—more than any other major metro. Most people earning a $100,805 salary can't afford a $1.4 million home, unless they’re receiving financial support.

Hartford and Kansas City See Biggest Drops in Homebuying Affordability, While San Antonio and Atlanta See Biggest Increases

In Hartford, CT, the average teacher can afford 22.1% of homes for sale within commuting distance of their school, down from 34% in 2023. That 11.9-percentage-point drop is the largest among the 50 most populous metros. Next come Kansas City (-7.9 ppts), Milwaukee (-6 ppts), Buffalo (-5.7 ppts) and Birmingham, AL (-5.2 ppts).

Most of these places have seen sizable increases in housing costs, but little or no increases in teacher pay. In Milwaukee, for example, the median list price rose 20.7% year over year to $349,900 in July—the biggest increase among the 50 most populous metros. But teacher pay only rose 3.3%—one of the smallest increases among the metros Redfin analyzed.

On the other end of the spectrum is San Antonio, which saw the biggest increase in teacher housing affordability. The average teacher there can afford 20.6% of homes for sale within commuting distance of their school, up 6.4 percentage points from 2023. It’s followed by Atlanta (4.6 ppts), Houston (3.7 ppts), Portland (2.9 ppts) and Dallas (2.1 ppts).

Teacher pay in San Antonio rose 4.5% year over year in 2023—not a huge jump—and median list prices in the metro as a whole are up from a year ago. But prices of homes specifically within commuting distance of San Antonio schools actually fell, which is why housing affordability improved. Please note that the table below includes median list prices for metros as a whole.

To view the full report, including methodology and more metro-level data, please visit:

https://www.redfin.com/news/teacher-housing-affordability-2024

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240814830032/en/

Contact Redfin

Redfin Journalist Services:

Kenneth Applewhaite

press@redfin.com

Source: Redfin

FAQ

What percentage of apartments can the average teacher afford near their school in 2024?

According to the Redfin report, the average teacher can afford 47.9% of apartments within commuting distance of their school in 2024, up from 40.7% in 2023.

How has the median U.S. teacher salary changed from 2023 to 2024?

The median U.S. teacher salary rose 3.8% year over year to $64,266 in 2023, according to the Redfin report.

What percentage of homes for sale near their school can the typical teacher afford?

The Redfin report states that the average teacher can afford 14.3% of homes for sale within commuting distance of their school, essentially unchanged from 14.4% in 2023.

Which U.S. city has the highest percentage of affordable apartments for teachers near schools?

According to the Redfin analysis, Portland, OR has the highest percentage, with teachers able to afford 91.3% of apartments within commuting distance of their school.

How has teacher housing affordability changed in Miami according to the Redfin (RDFN) report?

The Redfin report shows that Miami has the lowest housing affordability for teachers, with only 0.2% of apartments near schools being affordable. Additionally, the median teacher salary in Miami fell 11.9% year-over-year to $53,297 in 2023.