Active-duty military and veteran households are, on average, better able to afford housing than a typical U.S. household, according to a new Zillow analysis.
Nationally, it would take 29.6 percent of the typical household income to pay the median rent – just below the 30-percent rule of thumb for affordable housing. Active-duty military households would spend 24.9 percent of their income on that median rent, while a typical household with one or more veterans would spend 20.1 percent.
The results are similar for homeowners. The typical household in the U.S. would spend 16 percent of its income on a mortgage payment for the median home, while active-duty military households would spend 13.4 percent and veterans would spend 10.9 percent.
Improving the picture further are Veterans Affairs (VA) loans, which are available to military members and their families. VA loans typically offer lower rates, have more lenient credit requirements and do not require private mortgage insurance.
“Taking advantage of benefits like VA loans can really pay off,” said said Zillow Group economist Joshua Clark. “At current rates, a home buyer would save about $20,000 over the life of a loan on a typical home – and that’s before factoring in other benefits of VA loans such as not always requiring a down payment and limits on closing costs.”
There are only a few large metro areas where active-duty households have more difficulty affording housing than the population at large. Active-duty households in Seattle, San Diego and Portland typically spend a greater share of their income on mortgage and rent payments than the rest of the metro.
Military households in Florida enjoy the greatest relative affordability compared to their non-military neighbors. The gap in share of income spent on rent between active-duty households and the rest of the population is larger in Miami (15 percentage points), Orlando (11.7) and Tampa (11.3) than any other large U.S. metros.