Affordability Gap Between Income Levels and Housing Prices

If housing is defined by HUD as affordable when no more than one third of a household’s income should be allocated towards housing, this means that the maximum sale price a household can afford is about 3.794* times their annual income and the down payment required to purchase the home will be equal to 20% of this affordable price to secure a fixed 4.0% interest rate.

Based on these parameters, only households above Upper Middle income (earning greater than 195% of Nevada and Placer County’s area median income) would be able to afford the median sale price of $702,00 for a single-family home in Truckee without exceeding the 30% cost burden.

*Ownership Cost Assumptions Source: 2016 BAE Housing Needs Assessment

Buying Power for Home Purchase by Income Level for Nevada County

For Family of 4

Income Level – 200.5% AMI

  • Annual Income – $184,800 85% 85%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $702,000 100% 100%
  • Median Home Price – $702,000 100% 100%
  • Gap – $0 5% 5%
  • Down Payment Required – $107,600 42% 42%

Income Level – 170% AMI

  • Annual Income – $157,080 70% 70%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $595,333 85% 85%
  • Median Home Price – $702,000 100% 100%
  • Gap – $106,667 20% 20%
  • Down Payment Required – $107,600 45% 45%

Income Level – 120% AMI

  • Annual Income – $110,900 60% 60%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $420,311 60% 60%
  • Median Home Price – $702,000 100% 100%
  • Gap – $281,689 40% 40%
  • Down Payment Required – $107,600 55% 55%

Income Level – 100% AMI

  • Annual Income – $92,400 50% 50%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $350,196 50% 50%
  • Median Home Price – $702,000 100% 100%
  • Gap – $351,804 50% 50%
  • Down Payment Required – $107,600 60% 60%

Income Level – 80% AMI

  • Annual Income – $71,850 40% 40%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $272,312 40% 40%
  • Median Home Price – $702,000 100% 100%
  • Gap – $429,688 60% 60%
  • Down Payment Required – $107,600 75% 75%

Buying Power for Home Purchase by Income Level for Placer County

For Family of 4

Income Level – 205% AMI

  • Annual Income – $186,755 90% 90%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $702,000 100% 100%
  • Median Home Price – $702,000 100% 100%
  • Gap – $0 5% 5%
  • Down Payment Required – $107,600 40% 40%

Income Level – 170% AMI

  • Annual Income – $154,870 80% 80%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $586,957 80% 80%
  • Median Home Price – $702,000 100% 100%
  • Gap – $115,043 20% 20%
  • Down Payment Required – $107,600 50% 50%

Income Level – 120% AMI

  • Annual Income – $91,100 55% 55%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $414,247 55% 55%
  • Median Home Price – $702,000 100% 100%
  • Gap – $287,753 45% 45%
  • Down Payment Required – $107,600 55% 55%

Income Level – 100% AMI

  • Annual Income – $91,100 45% 45%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $345,269 45% 45%
  • Median Home Price – $702,000 100% 100%
  • Gap – $356,731 55% 55%
  • Down Payment Required – $107,600 60% 60%

Income Level – 80% AMI

  • Annual Income – $72,500 35% 35%
  • Buying Power – 3.79 66% 66%
  • Affordable Home Price – $274,775 35% 35%
  • Median Home Price – $702,000 100% 100%
  • Gap – $427,225 65% 65%
  • Down Payment Required – $107,600 65% 65%
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