Rising home prices have been a widely discussed topic in the housing market in Virginia. To contextualize this persistent issue at the county level, we compare the annual median household income in the different counties with the income required to afford a median priced home in those counties. Particularly, we focus on the 25-44-year-old demographic which comprises first-time buyers as well as move-up buyers in the residential housing market.

Figure 1: Estimated Annual Median Household Income vs. Annual Income Needed to Afford a Median Priced Home for 25-44-year-olds in Virginia

Key Findings:

1. 25-44-year-olds in parts of Northern Virginia, Greater Piedmont, as well as Goochland, Northumberland, Northampton, Richmond, Virginia Beach, Cumberland, Albemarle, Louisa, Craig, and Lee counties, have annual household incomes less than what is required to buy a median priced home in those counties.
2. Around 1 in 3 counties in Virginia have 25-44-year-olds making at or around the annual household income required to afford a median priced home in their counties.
3. In parts of Southwest, New River, Roanoke, Martinsville, Southern Piedmont, South Central, and Southside Virginia, 25-44-year-olds have an annual income higher than what is needed to afford a home at the median price in their counties. Particularly, Bland County residents make $50,000 or more above the income needed to afford a median priced home.

Methodology:

All calculations use the most recent data available for each topic. The calculations are estimates of income and housing costs. Incomes can vary widely by job sector, household composition, and location, among other factors. Mortgage costs and interest rates vary by borrower qualifications, loan type and structure, and time of origination, among other factors. The median sold price by county was retrieved from the Virginia REALTORS® database of the for-sale market and reflects the median sold price by county and city as of July 2024. Estimated mortgage payments were calculated using an average 6.75% interest rate for a 30-year fixed mortgage with a 20% down payment. Property taxes were estimated using local residential real estate tax rates by county and city (2022) compiled and published by the Virginia Department of Taxation. Homeowners insurance costs were estimated using an average premium of $2,400/yr. Median household income data by county and city were retrieved from the U.S. Census Bureau American Community Survey, 2022. 2023 household income was estimated by applying 2023 average wage growth for the South Atlantic Region from the Federal Reserve Bank of Atlanta to the 2022 income data. The affordability threshold for housing costs is 28% of household income.

For more information on housing, demographic and economic trends in Virginia, be sure to check out Virginia REALTORS® other Economic Insights blogs and our Data page.