The Five Most Affordable Places for Teachers to Buy a Home Are All in California

by Real estate financingMission+
10 minutes read

Merced, CA—an agricultural hub hit hard by the Great Recession—topped the list of U.S. metro areas where teachers had relatively high disposable incomes in 2020. Another California metro, San Jose, was the least affordable place for teachers to buy homes.

The five most affordable areas for teachers to purchase homes in 2020 were all located in inland California.

That’s according to a Redfin analysis of median disposable incomes for teachers in the 157 U.S. metropolitan areas where there was sufficient income data from the U.S. Bureau of Labor Statistics and sufficient housing-cost data from Redfin and other sources. Disposable income is the annual income a person has left after covering their yearly housing costs. Scroll down to the bottom of this report to read more about our methodology.

Five Most Affordable Metros for Teachers to Buy Homes In 2020

Metro Area Median Disposable Income for Teachers Who Own Homes Median Teacher Salary Median Annual Homeownership Cost Median Home Sale Price
Merced, CA $64,586 $99,637 $35,051 $277,000
Fresno, CA $54,510 $89,170 $34,659 $275,000
Riverside, CA $51,105 $91,220 $40,115 $350,000
Modesto, CA $50,950 $88,899 $37,949 $335,000
Bakersfield, CA $50,931 $87,710 $36,779 $238,000

In Merced, CA, the median teacher salary was $99,637 last year, while the median annual homeownership cost was $35,051. That means teachers there had a median disposable income of $64,586—the highest among the 157 metros in this analysis. Next came Fresno, with a median disposable income of $54,510, followed by Riverside ($51,105), Modesto ($50,950) and Bakersfield ($50,931).

Merced is a city (within the Merced metro) of about 90,000 people in central California, roughly two-and-a-half hours east of San Jose and two hours west of Yosemite National Park. The area is home to the University of California’s newest campus, UC Merced, and is one of the state’s top agricultural producers. During the Great Recession, Merced experienced one of the most severe drops in home prices in the country, rendering it a more affordable place to live than many other parts of California.

“Merced’s affordability also comes from its distance to big cities. People travel up to an hour for fine dining, shopping and sometimes work,” said Debbie Engel, a Keller Williams real estate agent and Redfin partner agent. “Still, Merced has been getting more expensive every year and real estate demand continues to peak. That’s largely due to the presence of UC Merced and the area’s affordability relative to other major California metros.”

For Teachers Who Rent, Inland California Is Also Relatively Affordable

Merced also topped the list of metros where it was most affordable for teachers to rent housing in 2020. With a median annual rental cost of $31,635 and a median teacher salary of $99,637, teachers who rented homes in Merced had a median disposable income of $68,002 last year. The median teacher salary in Merced was higher than that of any other metro in this analysis.

Next came Bend, OR, with a median disposable income of $60,192 for teachers who rented. Bend has exploded in popularity in recent years as city-dwellers have moved there in search of relative affordability and access to nature—a dynamic that has caused home prices to surge.

Rounding out the top five were Fresno, Modesto and Bakersfield, which also ranked on the top-five list of metros where it was most affordable for teachers to purchase homes.

Five Most Affordable Metros for Teachers to Rent Homes In 2020

Metro Area Median Disposable Income for Teachers Who Rent Homes Median Teacher Salary Median Annual Rental Cost  Median Monthly Rental Cost
Merced, CA $68,002 $99,637 $31,635 $2,636
Bend, OR $60,192 $90,700 $30,508 $2,542
Fresno, CA $57,211 $89,170 $31,959 $2,663
Modesto, CA $56,007 $88,899 $32,891 $2,741
Bakersfield, CA $55,103 $87,710 $32,607 $2,717

San Jose Is the Least Affordable Metro for Teachers to Purchase Homes

In San Jose, CA, the median teacher salary in 2020 was $90,314, while the median annual homeownership cost was $87,612. That left teachers with a median disposable income of just $2,703—the lowest among the 157 metros in this analysis. Next came Kahului, HI, with a median disposable income of $5,038, followed by St. George, UT ($6,560), Salinas, CA ($7,002) and Flagstaff, AZ ($8,388).

San Jose has long been one of the most expensive places to live in the country, offering no respite for house hunters looking to escape nearby San Francisco’s sky-high prices. The city, which is the tenth-most populous in the U.S., is in the heart of Silicon Valley. It’s home to scores of high-income tech workers, along with the headquarters of major companies including Adobe, PayPal and Zoom. 

“San Jose is expensive and those prices are going to keep on climbing. That’s because housing demand is far outpacing supply,” said local Redfin real estate agentRobert Garcia “Land is so scarce that there won’t be many new affordable residential building projects in the near future. If anything is going to change, it will have to come from raising teacher salaries on a policy level.”

One San Jose school district, which has grappled with teacher turnover due to high housing costs, has proposed building affordable rental housing for local teachers on school property—a plan that has drawn some backlash. In other pricey parts of California, government agencies are buying up luxury properties and offering reduced rents to accommodate middle-income workers, including teachers. 

Five Least Affordable Metros for Teachers to Buy Homes In 2020

Metro Area Median Disposable Income for Teachers Who Own Homes Median Teacher Salary Median Annual Homeownership Cost Median Home Sale Price
San Jose, CA $2,703 $90,314 $87,612 $1,195,000
Kahului, HI $5,038 $62,607 $57,569 $756,000
St. George, UT $6,560 $42,680 $36,120 $330,000
Salinas, CA $7,002 $63,680 $56,678 $675,000
Flagstaff, AZ $8,388 $47,329 $38,941 $412,000

St. George, UT Is the Least Affordable Metro for Teachers to Rent Homes

The median teacher salary in St. George, UT—a desert city in the southwestern corner of the state—was $42,680 last year, while the median annual rental cost was $32,144. That translates to a median disposable income of $10,536—the lowest among all metros in Redfin’s analysis. It was followed by Sierra Vista, AZ, with a median disposable income of $15,390, Twin Falls, ID ($17,319), Palm Bay, FL ($17,939) and Jackson, MS ($18,202).

The Palm Bay metro area is a large region on Florida’s east coast, midway between Jacksonville and Miami. It overlaps with Brevard County, which is home to Cape Canaveral—the launch location for many U.S. space missions. 

“The city of Palm Bay itself isn’t actually that pricey, but there are a handful of real estate hotspots within the larger metro area that raise the median home price in the region,” said local Redfin real estate agentMichael Moore. “One of those hotspots is Melbourne Beach—a town on a barrier island with luxury mansions overlooking the Atlantic Ocean and/or intracoastal waterways. Many areas farther north in Melbourne have also become more expensive due to their proximity to defense contractors and Cape Canaveral, which employ many people in the area.”

Five Least Affordable Metros for Teachers to Rent Homes In 2020

Metro Area Median Disposable Income for Teachers Who Rent Homes Median Teacher Salary Median Annual Rental Cost  Median Monthly Rental Cost
St. George, UT $10,536 $42,680 $32,144 $2,679
Sierra Vista, AZ $15,390 $40,986 $25,596 $2,133
Twin Falls, ID $17,319 $45,040 $27,721 $2,310
Palm Bay, FL $17,939 $44,894 $26,955 $2,246
Jackson, MS $18,202 $43,898 $25,697 $2,141

Full Metro-Level Breakdown (2020)

Methodology

For this analysis, we used annual data from the U.S. Bureau of Labor Statistics on the median teacher salary for K-12 teachers (excluding special and career/technical educators) for each core-based statistical area (CBSA, aka metro area). We then computed the annual cost of owning a single-family home in each metro area by estimating mortgage payments based on 2020 median sale price data from Redfin. We assumed 3% interest on 30-year fixed loans. We also factored in the cost of average HOA fees, local homeowners insurance and property taxes based on county-records data, as well as state and local taxes based on data from the IRS, and  energy and water costs based on data from the U.S. Energy Information Administration. In addition, we used data on rents and transportation costs from the Housing +Transportation (H+T®) Affordability Index. Metro areas were then ranked by the difference in annual teacher pay and annual cost of housing (for both owning and renting). There were 157 metros with sufficient data on disposable incomes for homeowners and 161 metros with sufficient data on disposable incomes for renters.

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