CHARLOTTE, N.C., July 17, 2018 /PRNewswire/ -- LendingTree®,
the nation's leading online loan marketplace, today released a
study on where home price inequality is highest.
The GINI coefficient, a
well-regarded metric, is the most commonly used measure of economic
inequality. The coefficient ranges from 0 (complete equality where
every value is the same) to 1 (complete inequality where one entity
has 100 percent of the value
and all others have none). Thus, a higher GINI coefficient means
there is more inequality. LendingTree analyzed homes in the 50
largest metro areas to determine the GINI coefficient of home
values in each metro to measure home price inequality in each
market.
"Inequality is the defining economic debate of our times," said
Tendayi Kapfidze, Chief Economist and report author. "Since 1980,
the majority of income growth in the
United States has accrued to the top of the income scale, a
trend that accelerated following the 2007-08 financial crisis. Home
values have finally recovered from the most recent housing crisis
to the extent that affordability is now a concern. In many large
cities, the median-priced home is now out of reach of median income
households."
LendingTree's study ranks the top 50 cities by the GINI
coefficient and shows the values of the 5th and 95th percentile
homes and their ratio to provide a more tangible measure of home
value inequality.
Key Findings
- Detroit, Birmingham, Ala. and Indianapolis have the highest home price
inequality in the nation, with a level of inequality twice that
of the most equal markets.
- Salt Lake City,
Portland, Ore. and Denver have the least home price
inequality. The 95th percentile of home values is 3x the value
of the 5th percentile in these markets, compared with over 10x the
value in the most unequal markets.
- High home prices don't necessarily mean high inequality.
The San Jose and San Francisco metros, with the highest values
for the 95th percentile of homes ($2.7
million and $2.3 million,
respectively) ranked No. 41 and No. 33 out of 50 for
inequality.
- The metros with the most inequality tended to have very low
prices for the 5th percentile of home values. Of the 10 most
unequal markets, none had a 5th percentile home value of
$100,000 or more, and averaged
$48,500. The most equal markets had a
$242,100 average value for the 5th
percentile of homes.
- The World Bank lists the income GINI for the U.S. at 0.415 in
2016. Only the top-ranked city, Detroit at 0.446, was above this level. So
income inequality is greater than home value inequality, a
phenomenon also reflected in the fact that wealthier households
don't need to spend as high a portion of their earnings on
housing.
- The Midwest dominates the most unequal, while the West dominates the most
equal.
- The most equal markets are less affordable for borrowers with
low incomes.
Cities with the most unequal housing markets
#1 Detroit
- GINI Coefficient: 0.446
- 95th Percentile Home Price: $431,000
- 5th Percentile Home Price: $32,000
- Multiple of 95th to 5th Percentile home price: 13.5
#2 Birmingham, Ala.
- GINI Coefficient: 0.392
- 95th Percentile Value: $518,000
- 5th Percentile Value: $45,000
- Multiple of 95th to 5th Percentile: 11.5
#3 Indianapolis
- GINI Coefficient: 0.385
- 95th Percentile Value: $445,000
- 5th Percentile Value: $44,000
- Multiple of 95th to 5th Percentile: 10.1
Cities with the most equal housing markets
#48 Denver
- GINI Coefficient: 0.226
- 95th Percentile Value: $885,000
- 5th Percentile Value: $260,000
- Multiple of 95th to 5th Percentile: 3.40
#49 Portland, Ore.
- GINI Coefficient: 0.217
- 95th Percentile Value: $772,000
- 5th Percentile Value: $237,000
- Multiple of 95th to 5th Percentile: 3.25
#50 Salt Lake City
- GINI Coefficient: 0.210
- 95th Percentile Value: $597,000
- 5th Percentile Value: $191,000
- Multiple of 95th to 5th Percentile: 3.10
"As we went through the analysis, we reached a conclusion that
might be counterintuitive to conventional thought — housing value
inequality might be a good thing," said Kapfidze.
"Cities with more home value inequality have a wider
distribution of home values, which means that families earning
lower incomes may still have the opportunity to access
homeownership in these cities. The concurrent presence of high
value homes suggests that their economies are vibrant enough to
support higher earning jobs as well. Looked at in this manner, home
value inequality could be beneficial."
To view the full report, visit
https://www.lendingtree.com/home/where-home-price-inequality-is-highest/.
Home Price Inequality in the
Top 50 MSAs
|
Rank
|
City
|
Gini
Coefficient
|
95th
Percentile
Home Price
|
5th
Percentile
Home Price
|
Ratio
(95th/5th)
|
1
|
Detroit
|
0.446
|
$431,000
|
$32,000
|
13.5
|
2
|
Birmingham,
Ala.
|
0.392
|
$518,000
|
$45,000
|
11.5
|
3
|
Indianapolis
|
0.385
|
$445,000
|
$44,000
|
10.1
|
4
|
St.
Louis
|
0.379
|
$493,000
|
$43,000
|
11.5
|
5
|
Cleveland
|
0.374
|
$401,000
|
$41,000
|
9.8
|
6
|
Memphis,
Tenn.
|
0.370
|
$423,000
|
$39,000
|
10.8
|
7
|
Pittsburgh
|
0.367
|
$471,000
|
$53,000
|
8.9
|
8
|
Chicago
|
0.355
|
$668,000
|
$68,000
|
9.8
|
9
|
Kansas City,
Mo.
|
0.352
|
$398,000
|
$40,000
|
10.0
|
10
|
Charlotte,
N.C.
|
0.351
|
$653,000
|
$80,000
|
8.2
|
11
|
Jacksonville,
Fla.
|
0.349
|
$533,000
|
$52,000
|
10.3
|
12
|
Atlanta
|
0.347
|
$620,000
|
$75,000
|
8.3
|
13
|
New
York
|
0.347
|
$1,230,000
|
$159,000
|
7.7
|
14
|
Houston
|
0.346
|
$645,000
|
$94,000
|
6.9
|
15
|
New
Orleans
|
0.344
|
$617,000
|
$91,000
|
6.8
|
16
|
Louisville/Jefferson County, Ky.
|
0.339
|
$464,000
|
$56,000
|
8.3
|
17
|
Baltimore
|
0.337
|
$709,000
|
$69,000
|
10.3
|
18
|
Miami
|
0.337
|
$968,000
|
$152,000
|
6.4
|
19
|
Cincinnati
|
0.336
|
$463,000
|
$61,000
|
7.6
|
20
|
Dallas
|
0.334
|
$652,000
|
$95,000
|
6.9
|
21
|
Columbus,
Ohio
|
0.333
|
$494,000
|
$53,000
|
9.3
|
22
|
Oklahoma
City
|
0.332
|
$419,000
|
$51,000
|
8.2
|
23
|
Tampa,
Fla.
|
0.330
|
$563,000
|
$75,000
|
7.5
|
24
|
Nashville,
Tenn.
|
0.329
|
$709,000
|
$110,000
|
6.4
|
25
|
Milwaukee
|
0.327
|
$532,000
|
$60,000
|
8.9
|
26
|
Philadelphia
|
0.327
|
$628,000
|
$74,000
|
8.5
|
27
|
Buffalo,
N.Y.
|
0.319
|
$370,000
|
$45,000
|
8.2
|
28
|
Seattle
|
0.317
|
$1,336,000
|
$234,000
|
5.7
|
29
|
Los
Angeles
|
0.311
|
$2,134,000
|
$330,000
|
6.5
|
30
|
Boston
|
0.308
|
$1,318,000
|
$231,000
|
5.7
|
31
|
Austin,
Texas
|
0.304
|
$796,000
|
$160,000
|
5.0
|
32
|
Raleigh,
N.C.
|
0.303
|
$629,000
|
$112,000
|
5.6
|
33
|
San
Francisco
|
0.298
|
$2,279,000
|
$387,000
|
5.9
|
34
|
Virginia Beach,
Va.
|
0.293
|
$576,000
|
$103,000
|
5.6
|
35
|
Washington
|
0.293
|
$1,092,000
|
$202,000
|
5.4
|
36
|
Richmond,
Va.
|
0.292
|
$602,000
|
$99,000
|
6.1
|
37
|
San
Antonio
|
0.292
|
$506,000
|
$91,000
|
5.6
|
38
|
Orlando,
Fla.
|
0.290
|
$557,000
|
$100,000
|
5.6
|
39
|
Phoenix
|
0.284
|
$638,000
|
$140,000
|
4.6
|
40
|
Providence,
R.I.
|
0.274
|
$669,000
|
$158,000
|
4.2
|
41
|
San Jose,
Calif.
|
0.270
|
$2,687,000
|
$561,000
|
4.8
|
42
|
San
Diego
|
0.264
|
$1,598,000
|
$363,000
|
4.4
|
43
|
Minneapolis
|
0.260
|
$617,000
|
$150,000
|
4.1
|
44
|
Riverside,
Calif.
|
0.259
|
$700,000
|
$152,000
|
4.6
|
45
|
Hartford,
Conn.
|
0.256
|
$536,000
|
$127,000
|
4.2
|
46
|
Las
Vegas
|
0.247
|
$591,000
|
$153,000
|
3.9
|
47
|
Sacramento,
Calif.
|
0.229
|
$812,000
|
$227,000
|
3.6
|
48
|
Denver
|
0.226
|
$885,000
|
$260,000
|
3.4
|
49
|
Portland,
Ore.
|
0.217
|
$772,000
|
$237,000
|
3.3
|
50
|
Salt Lake
City
|
0.210
|
$597,000
|
$191,000
|
3.1
|
About LendingTree
LendingTree (NASDAQ: TREE) is the
nation's leading online loan marketplace, empowering consumers as
they comparison-shop across a full suite of loan and credit-based
offerings. LendingTree provides an online marketplace which
connects consumers with multiple lenders that compete for their
business, as well as an array of online tools and information to
help consumers find the best loan. Since inception, LendingTree has
facilitated more than 65 million loan requests. LendingTree
provides free monthly credit scores through My LendingTree and
access to its network of over 500 lenders offering home loans,
personal loans, credit cards, student loans, business loans, home
equity loans/lines of credit, auto loans and more. LendingTree, LLC
is a subsidiary of LendingTree, Inc. For more information go to
www.lendingtree.com, dial 800-555-TREE, like our Facebook page
and/or follow us on Twitter @LendingTree.
MEDIA CONTACT:
Megan Greuling
704-943-8208
Megan.greuling@lendingtree.com
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