Household Income Distribution in the U.S. Visualized as 100 Homes
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Household Income Distribution in the U.S. Visualized as 100 Homes

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U.S. household income distribution visualization

Household Income Distribution in the U.S. Visualized as 100 Homes

Income inequality and wealth disparity have been frequent topics of conversation, even before the pandemic upended the economy.

Now, rising inflation and interest rates, and a possible recession on the horizon are bringing these societal divides into sharp focus.

In the above visualization, U.S. households are parsed out into a neighborhood of 100 homes and then grouped by income brackets, using recent data from the U.S. Census Bureau.

The Neighborhood Breakdown

American households vary widely on their respective incomes. The largest cluster of homes, representing nearly 20% of all American households, are in the $25-$49.9k income bracket.

Here’s a look at the share of households in each income bracket and the number of homes they represent.

Household IncomeShare of TotalNumber of Homes
Under $25K18.1%18
$25K-$49.9K19.7%20
$50K-$74.9K16.5%17
$75K-99.9K12.2%12
$100K-$149.9K15.3%15
$150k-$199.9K8.0%8
Over $200K10.3%10

In our hypothetical neighborhood, 18 of the households are in the lowest income bracket. People in this category have a wide variety of jobs, but personal care aides, cashiers, food and beverage positions are some of the most common. As a point of reference, the poverty line for a family of four currently sits at $26,496.

On the flip side, in this small community of 100 houses, 33 earn six figures and typically have at least one family member in a corporate or medical role.

The American Middle Class

The middle class in America has shrunk significantly in the past 50 years, going from 61% of adults being middle income in 1971 to 50% in 2021.

Here’s a look at the economic class breakdowns by annual household income, based on households with three people (Note: the average U.S. household has 2.6 people):

  • Upper class: >$156,000
  • Middle class:  $52,000-$156,000
  • Lower class: <$52,000

Although these definitions and conditions don’t align exactly with the buckets we use in the main houses visualization, they come pretty close.

In the neighborhood of 100 homes, 38 homes could be considered low income, while 18 are high income. Meanwhile, sitting in the $50-149.9k middle range of household income are 44 homes.

The Larger Trends

The pandemic had an extremely adverse impact on earnings and income worldwide, and the U.S. was no exception.

Median household income decreased 2.9% to $67.5k between 2019 and 2020, the first decrease since 2014. Additionally, the number of people who worked full-time jobs, year-round decreased by around 13.7 million.

That said, when looking at the longer-term trend, the median income for those considered middle class has jumped by 50% over the last five decades. Here’s a look at the median incomes in each economic class in 1970 vs. 2020:

 1970 Median Household Income (in 2020 $)2020 Median Household Income% Change
Low Income$20,604$29,96345%
Middle Income$59,934$90,13150%
Upper Income$130,008$219,57269%

With a recession⁠ highly likely to occur in the U.S., and rising inflation causing increases in the cost of basic, everyday goods, budgets may get tighter for many households in America, and incomes are likely to be impacted as well.

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Personal Finance

Mapped: The Salary You Need to Buy a Home in 50 U.S. Cities

Is owning a home still realistic? This map lays out the salary you’d need to buy a home in 50 different U.S. metro areas.

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This is the Salary You Need to Buy a Home in 50 U.S. Cities

Depending on where you live, owning a home may seem like a far off dream or it could be fairly realistic. In New York City, for example, a person needs to be making at least six figures to buy a home, but in Cleveland you could do it with just over $45,000 a year.

This visual, using data from Home Sweet Home, maps out the annual salary you’d need for home ownership in 50 different U.S. cities.

Note: The map above refers to entire metro areas and uses Q1 2022 data on median home prices. The necessary salary was calculated by the source, looking at the base cost of principal, interest, property tax, and homeowner’s insurance.

Home Ownership Across the U.S.

San Jose is by far the most expensive city when it comes to purchasing a home. A person would need to earn over $330,000 annually to pay off the mortgage at a monthly rate of $7,718.

Here’s a closer look at the numbers:

RankMetro AreaMedian Home PriceSalary Needed
#1San Jose$1,875,000$330,758
#2San Francisco$1,380,000$249,685
#3San Diego$905,000$166,828
#4Los Angeles$792,500$149,127
#5Seattle$746,200$140,768
#6Boston$639,000$130,203
#7New York City$578,100$129,459
#8Denver$662,200$121,888
#9Austin$540,700$114,679
#10Washington, D.C.$553,000$110,327
#11Portland$570,500$109,267
#12Riverside/San Bernardino$560,000$106,192
#13Sacramento$545,000$105,934
#14Miami$530,000$103,744
#15Salt Lake City$556,900$100,970
#16Providence$406,700$88,477
#17Phoenix$474,500$86,295
#18Las Vegas$461,100$84,116
#19Raleigh$439,100$83,561
#20Dallas$365,400$81,165
#21Orlando$399,900$79,573
#22Chicago$325,400$76,463
#23Tampa$379,900$75,416
#24Houston$330,800$74,673
#25Minneapolis$355,800$74,145
#26Baltimore$350,900$73,803
#27Nashville$387,200$73,502
#28Jacksonville$365,900$73,465
#29Hartford$291,000$73,165
#30Charlotte$379,900$72,348
#31San Antonio$321,100$70,901
#32Atlanta$350,300$69,619
#33Philadelphia$297,900$69,569
#34Richmond$354,500$68,629
#35Milwaukee$298,800$65,922
#36Kansas City$287,400$60,507
#37Columbus$274,300$59,321
#38Virginia Beach$289,900$59,245
#39New Orleans$281,100$57,853
#40Birmingham$289,500$55,662
#41Indianapolis$271,600$53,586
#42Memphis$259,300$52,691
#43Cincinnati$244,300$51,840
#44Buffalo$202,300$51,525
#45Detroit$224,300$50,302
#46St Louis$216,700$48,988
#47Louisville$235,400$48,121
#48Cleveland$192,700$45,448
#49Oklahoma City$198,200$45,299
#50Pittsburgh$185,700$42,858

Perhaps surprisingly, Boston residents need slightly higher earnings than New Yorkers to buy a home. The same is also true in Seattle and Los Angeles. Meanwhile, some of the cheapest cities to start buying up real estate in are Oklahoma City and Cleveland.

As of April, the rate of home ownership in the U.S. is 65%. This number represents the share of homes that are occupied by the owner, rather than rented out or vacant.

The American Dream Home

As of the time of this data (Q1 2022), the national yearly fixed mortgage rate sat at 4% and median home price at $368,200. This put the salary needed to buy a home at almost $76,000⁠—the median national household income falls almost $9,000 below that.

But what kind of homes are people looking to purchase? Depending on where you live the type of home and square footage you can get will be very different.

In New York City, for example, there are fairly few stand-alone, single-family houses in the traditional sense⁠—only around 4,000 are ever on the market. People in the Big Apple tend to buy condominiums or multi-family units.

Additionally, if you’re looking for luxury, not even seven figures will get you much in the big cities. In Miami, a million dollars will only buy you 833 square feet of prime real estate.

One thing is for sure: the typical American dream home of the big house with a yard and white picket fence is more attainable in smaller metro areas with ample suburbs.

Buying vs. Renting

The U.S. median household income is $67,500, meaning that today the typical family could only afford a home in about 15 of the 50 metro areas highlighted above, including New Orleans, Buffalo, and Indianapolis.

With the income gap widening in the U.S., the rental market remains a more attractive option for many, especially as prices are finally tapering off. The national median rent price was down nearly 3% from June to July for two-bedroom apartments.

At the end of the day, buying a home can be an important investment and may provide a sense of security, but it will be much easier to do in certain types of cities.

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Investor Education

Countries with the Highest Default Risk in 2022

In this infographic, we examine new data that ranks the top 25 countries by their default risk.

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Countries with the Highest Default Risk in 2022

In May 2022, the South Asian nation of Sri Lanka defaulted on its debt for the first time. The country’s government was given a 30-day grace period to cover $78 million in unpaid interest, but ultimately failed to pay.

Not only does this impact Sri Lanka’s economic future, but it also raises an important question: which other countries are at risk of default?

To find out, we’ve used data from Bloomberg to rank the countries with the highest default risk.

The Sovereign Debt Vulnerability Ranking

Bloomberg’s Sovereign Debt Vulnerability Ranking is a composite measure of a country’s default risk. It’s based on four underlying metrics:

  • Government bond yields (the weighted-average yield of the country’s dollar bonds)
  • 5-year credit default swap (CDS) spread
  • Interest expense as a percentage of GDP
  • Government debt as a percentage of GDP

To better understand this ranking, let’s focus on Ukraine and El Salvador as examples.

CountryRankGovernment Bond
Yield (%)
5Y CDS SpreadInterest Expense
(% of GDP)
Government Debt
(% of GDP)
🇸🇻 El Salvador131.8%3,376 bps
(33.76%)
4.9%82.6%
🇺🇦 Ukraine860.4%10,856 bps
(100.85%)
2.9%49%

1 basis point (bps) = 0.01%

Why are Ukraine’s Bond Yields so High?

Ukraine has high default risk due to its ongoing conflict with Russia. To understand why, consider a scenario where Russia was to assume control of the country. If this happened, it’s possible that Ukraine’s existing debt obligations will never be repaid.

That scenario has prompted a sell-off of Ukrainian government bonds, pushing their value down to nearly 30 cents on the dollar. This means that a bond with face value of $100 could be purchased for $30.

Because yields move in the opposite direction of price, the average yield on these bonds has climbed to a very high 60.4%. As a point of comparison, the yield on a U.S. 10-year government bond is currently 2.9%.

What is a CDS Spread?

Credit default swaps (CDS) are a type of derivative (financial contract) that provides a lender with insurance in the event of a default. The seller of the CDS represents a third party between the lender (investors) and borrower (in this case, governments).

In exchange for receiving coverage, the buyer of a CDS pays a fee known as the spread, which is expressed in basis points (bps). If a CDS has a spread of 300 bps (3%), this means that to insure $100 in debt, the investor must pay $3 per year.

Applying this to Ukraine’s 5-year CDS spread of 10,856 bps (108.56%), an investor would need to pay $108.56 each year to insure $100 in debt. This suggests that the market has very little faith in Ukraine’s ability to avoid default.

Why is El Salvador Ranked Higher?

Despite having lower values in the two metrics discussed above, El Salvador ranks higher than Ukraine because of its larger interest expense and total government debt.

According to the data above, El Salvador has annual interest payments equal to 4.9% of its GDP, which is relatively high. Comparing to the U.S. once more, America’s federal interest costs amounted to 1.6% of GDP in 2020.

When totaled, El Salvador’s outstanding debts are equal to 82.6% of GDP. This is considered high by historical standards, but today it’s actually quite normal.

The next date to watch will be January 2023, as this is when the country’s $800 million sovereign bond reaches maturity. Recent research suggests that if El Salvador were to default, it would experience significant, yet temporary, negative effects.

Another Hot Topic for El Salvador: Bitcoin

In September 2021, El Salvador became the first country in the world to adopt bitcoin as legal tender. This means that Bitcoin is recognized by law as a means to settle debts and other obligations.

The International Monetary Fund (IMF) criticized this decision in early 2022, urging the country to revoke legal tender status. In hindsight, these warnings were wise, as Bitcoin’s value has fallen by 56% year-to-date.

While this isn’t directly related to El Salvador’s default risk, it does open potential avenues for relief. For instance, large players in the crypto space may be willing to assist the government to keep the concept of “nation-state bitcoin adoption” alive.

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