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Higher Home Prices Could Mean More Workers Per Household

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As the cost of living rises, people are finding new ways to help make ends meet. For families, this could mean that both parents have to work jobs outside of the home. For single people, it could mean cohabitating with a roommate or a parent well into adulthood. Regardless of what it looks like for a specific household, the growing cost of living means that there are more workers per household than there have been over the past few decades.

In a new study, LendingTree, the nation’s largest online loan marketplace, sought to better understand the relationship between the rising cost of living and the increasing number of workers per household. To do so, we have focused on one factor that contributes to this rise in the average number of workers per household: home price.

LendingTree’s analysis found that there is a statistically significant relationship between an area’s median home price and the average number of workers per household in that area. While there are some exceptions, based upon our study, it is reasonable to conclude that areas with higher home prices will likely result in higher rates of two or more workers living in a single household.

Key findings

  • There is a positive correlation between the average number of workers per household and the median home price in the nation’s largest metros. With a statistically significant correlation coefficient of 0.56, our data shows that, barring a few exceptions, metropolitan areas where there are more workers per household are likely to have higher home prices.
  • Salt Lake City is the metro with the highest average number of workers per household. This is surprising because, although the median home price in that area is above average, it isn’t nearly as high as it is in other metros. As a result, there are probably other factors outside of home price, like marriage rates, that drive up the average number of workers per household in Salt Lake City. Nonetheless, our data indicates that marriage rates have less of an impact on the number of workers per household than home prices do.
  • Pittsburgh metropolitan area has the lowest average number of workers per household. A low median home price is one of the main reasons why many households manage to get by with just a single worker.
  • There are a few exceptions to the trend that shows higher home prices correlating with higher numbers of workers per household. For example, the median home price in the Sacramento, Calif., metro area is $339,500, but the average number of workers per household is lower there than it is in most other metros. This goes to show that other factors, like different cultural expectations and/or how strong an area’s job market is, also have an influence on how many workers live in a single household.
  • Though the average number of workers per household is on the rise, the majority of households in the country’s largest metros are still occupied by one or fewer workers. About 40% of households in the nation’s largest metros have only a single worker, which suggests that there is still plenty of opportunities for a single person to make enough income to keep their household afloat. Around 24% of households in the nation’s largest metros have zero workers, but that does not mean that those who occupy zero worker households have never worked, as some of these kinds of occupants are retired.

Metros with highest average number of workers per household

No. 1: Salt Lake City

  • Total occupied households: 382,620
  • % of homes with 0 workers: 17%
  • % of homes with 1 worker: 37%
  • % of homes with 2 workers: 34%
  • % of homes with 3 workers: 11%
  • Average number of workers per household: 1.52
  • Median home value: $255,100

No. 2 (tie): San Jose, Calif.

  • Total occupied households: 647,891
  • % of homes with 0 workers: 19%
  • % of homes with 1 worker: 38%
  • % of homes with 2 workers: 33%
  • % of homes with 3 workers: 11%
  • Average number of workers per household: 1.47
  • Median home value: $815,000

No. 2 (tie): Washington, D.C.

  • Total occupied households: 2,170,034
  • % of homes with 0 workers: 17%
  • % of homes with 1 worker: 40%
  • % of homes with 2 workers: 33%
  • % of homes with 3 workers: 9%
  • Average number of workers per household: 1.47
  • Median home value: $397,900

Metros with lowest average number of workers per household

No. 1 (tie): Pittsburgh

  • Total occupied households: 1,000,493
  • % of homes with 0 workers: 30%
  • % of homes with 1 worker: 37%
  • % of homes with 2 workers: 28%
  • % of homes with 3 workers: 6%
  • Average number of workers per household: 1.12
  • Median home value: $142,100

No. 1 (tie): Cleveland

  • Total occupied households: 853,766
  • % of homes with 0 workers: 30%
  • % of homes with 1 worker: 38%
  • % of homes with 2 workers: 26%
  • % of homes with 3 workers: 6%
  • Average number of workers per household: 1.12
  • Median home value: $142,400

No. 1 (tie): Buffalo, N.Y.

  • Total occupied households: 474,349
  • % of homes with 0 workers: 32%
  • % of homes with 1 worker: 36%
  • % of homes with 2 workers: 26%
  • % of homes with 3 workers: 6%
  • Average number of workers per household: 1.12
  • Median home value: $135,000

Is it possible to get by on a single worker’s income?

There are still many instances where a single income is enough to support a household. In fact, households with one or fewer workers are still the norm in the metros featured in our study.But this trend appears to be changing. For example, millennials are cohabitating at rates far greater than members of previous generations, likely as a result of the rising costs of necessities like housing and education. Therefore, there is good chance that households with more than one worker may someday soon become the norm.

Nonetheless, there are options for people who prefer to live in a single-income household, like get by on a single income. Beyond that, debt consolidation and refinancing can take away some of the financial burdens that tend to make more than one income a necessity. In that same vein, there are certain loan programs available, like HomeReady® and FHA loans, which can help those making a single income more easily save up for things like a down payment.

Methodology

The data on the total and average number of workers per household, as well as the data on median home value, come from the 2017 American Community Survey, the most recent survey with data on these subjects available at the time of writing.

For the purposes of this study, correlation coefficients above 0.5 were considered statistically significant, while coefficients between 0.49 and 0.11 were considered potentially significant and coefficients 0.10 and below were considered not significant.

 

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