- Construction workers would need to work overtime, year-round, in order to afford the median-priced home in the 15 most unaffordable large metros across the country, according to an analysis by home improvement and project site Porch.
- In San Jose, California, the No. 1 most unaffordable large metro for construction workers, someone earning the median hourly wage of $29.90 would need to work 110.5 hours a week, year-round, to afford a median-price home of $1,211,049.
- Among the 15 least-affordable small metros, which were led by Santa Cruz, California, a construction worker earning the median hourly wage would need to work 86.8 hours a week to afford a median-priced home. And in the 15 least-affordable midsize metros, where Santa Barbara, California, was at the top, a worker earning the median wage would need to work 69.2 hours per week.
Porch’s analysis looked at Bureau of Labor Statistics' Occupational Employment Survey, paired with data from the Zillow Home Value Index, to determine how many hours construction workers earning the median wage would need to work to afford a median-price home in dozens of metro areas across the United States. It deemed a home to be affordable if a homeowner spent no more than 30% of their income on mortgage payments.
The report also noted that while workers in many industries can work remotely, construction workers need to be physically present where they build, a fact that, combined with these house prices, forces many to commute long distances for their jobs, or forego homeownership altogether.
The analysis took into account the changing employment and construction spending levels from 2000 to 2020, to illustrate how sensitive the sector is to broader economic trends, including the impacts of the COVID-19 pandemic this year.
For example, the analysis showed that the seasonally adjusted annual rate of construction spending declined from its peak of $1.44 trillion in February 2020, before the pandemic hit, to $1.36 trillion in July, while construction employment decreased from 7.6 million to 7.2 million workers.
The analysis also showed that after a sharp decline in the first half of 2020, sales of new single-family residences were up 36.3% year-over-year in July.
Porch also tracked construction worker wages for the last two decades, which it said fell slightly behind overall wage growth. Despite that slip, however, a construction worker earning the national median hourly wage of $22.80 could still afford the median price home of $253,527.
Not included in the analysis, which looked at all U.S. home sales, was the median price of a new home – the homes that construction workers are paid to build now. That price was $326,800 in September, according to the Federal Reserve Bank of St. Louis, well beyond the reach of a construction worker earning the national median hourly wage.
Most unaffordable large metros for construction workers
|Rank||Market||Median home price||Median hourly construction wage||Weekly hours needed to afford median price home|
|1||San Jose, California||$1,211,049||$29.90||110.5|
|9||Salt Lake City||$399,291||$23.05||47.3|
|14||San Bernardino, California||$395,370||$25.00||43.2|