Montgomery County Housing Affordability

Brought to you by the Montgomery County Maryland Performance and Data Analytics Team 

Housing Supply

As of 2015 there are estimated to be over 380,000 Dwelling units within Montgomery County Maryland . Only 6,000 or 2% of all dwelling units  have been built since 2010, this will put Montgomery County residential development over 30,000 units behind the pace of the previous two decades and even further behind the development that occurred in the 60's, 70's, and 80's.  With no decrease in demand for housing within the region, Montgomery County is struggling to be a place for all to live, regardless of income.



Population vs Housing 

According to the housing estimates for the past 30 years Montgomery County has maintained 2.8-3 person to dwelling unit ratio. That being understood there are multiple factors that that have led to the  increase in housing costs including building costs, lack of skilled labor, and supply of of build-able land. 

Market Indicators 

Montgomery County has developed a set of indicators that represent a high-level barometer of County performance and reflect the quality-of-life in Montgomery County.  This also allows the County to compare its performance against itself over time, and to also compare performance to other like counties, both regionally and nationally.  Based on a set of criteria, including income and other demographic variables, we selected a group of 38 jurisdictions across the country, one of which is yours.  Click below to compare with other jurisdictions.

Residential Development 1950-2016

According to the Montgomery County Planning department only 4% of build-able land is still available for development within the county.

Rising Values of Homes 

The median Assessed home value in Montgomery County is  $603,000 for all homes built from 2010-2016, according to the Maryland State tax records. Only 3,900 assessed homes were built and valued equal to or less than $400,000 while 2,275 residential homes over $750,000 were built during the same period. To the right can be seen all Montgomery County Residential Parcels that were assessed in 2016 and the year that they were built.  

The true cost of buying a home 

Many home buyers under estimate the cost of ownership. Their are many extra cost to purchasing a home that go much farther than interest and principle.  Below are descriptions of insurance, fees, and taxes that many home buyers incur on their journey to home ownership.  Use the App Estimate your monthly housing costs below using the mortgage calculator (Feb. 2017 Fixed Rate 3.98%).
PMI Insurance—Private Mortgage Insurance (PMI) is an insurance policy that protects the mortgage lender if the borrower is unable to repay. In the United States, if the down payment is less than 20% of the property value, the lender normally will require the borrower to purchase PMI until the loan-to-value ratio (LTV) reach 80%. PMI price varies per down payment amount, size of the loan, credit of the borrower, etc. The annual cost typically ranges from 0.3% to 1.5% of the loan amount.
Other Costs—This includes utilities, home maintenance costs, etc. Home utilities and maintenance costs can be expensive. For example, it is common to spend more than $500 per month in heating during the winter months in New York for a 2,000 square foot house. Maintenance costs can be expensive too. It is not uncommon to spend 1% of your total property value for home repairs each year.
Property Taxes—A property tax is a tax that property owner pays to governing authority. In the United States, property tax is usually managed by municipal government or county government. The annual real estate tax in the United States varies per location, normally ranging from 0% to 4% of the property value. In some extreme cases, the tax rate can be 10% or higher.
HOA Fee—Homeowners Association (HOA) Fee is the fee that imposed on the property owner by HOA, which is an organization that helps maintaining and improving property and environment in the same group. Condominium and townhouse normally have HOA. It may also exist in some single family community. HOA fee typically ranges from a few hundreds to a few thousand dollars per year in the United States.
Home Insurance—Also called homeowner's insurance, is an insurance policy that protect the owner from accidents that may happen to the private residence or other real estate properties. Home insurance policies in the United States also contain personal liability coverage, which protects against lawsuits involving injuries that occur on and off the property. Home insurance is required by most lenders. The cost of home insurance varies per locations, condition of the property, coverage amount, etc. Typically, the annual cost ranges from 0.1% to 5% of the property values.
Closing Cost—It is fees paid at the closing of a real estate transaction. It is not a recurring fee yet it can be expensive. In the United States it includes attorney fee, title service cost, recording fees, survey fee, property transfer tax, brokerage commission, mortgage application fees, points, appraisal fees, Inspection fees, home warranties, pre-paid home insurance, pro-rata property taxes, pro-rata homeowner association dues, pro-rata Interest, etc. Not all of these are applicable depending on your specific situations. The seller will share some of the cost. However, it is normal to pay $10,000 closing cost on a $300,000 transaction for a buyer.

Rising incomes chasing the cost of living 

The median income in Montgomery County has risen to $98,314 (2015) yet like many metropolitan area jurisdictions, Montgomery County has not out-paced the annual increase in the cost of living (National CPI). The Household Median Income (2015 adjusted dollars) in Montgomery County has remained flat since  the year 2000.

Home Ownership is out of reach for most, and very difficult for some

According to the United States Census Bureau 67% of homeowners that are below the County's median income $98,314 (ACS 2015 1 year estimate) pay 30% or more of their annual Income on Housing Costs, and 40%  of homeowners pay over 50% of their annual income.  

National Housing Burden indicator

When compared to other like counties, the percent of Montgomery County home-owners that are housing burdened is slightly below the median of our national bench-marked counties. Montgomery County like our bench-marked counter-parts are extremely wealthy compared to the universe of counties in the United States, this leads to a reasonably low housing burden for many home owners in the county, but leaves many stretching to achieve even the most modest home ownership. 

Cost of Ownership

According to the United States Census Bureau over 64,000 Montgomery County households pay 30% or more of there Monthly annualized income on monthly housing costs and expenses which includes costs such as mortgage, utilities, and repairs. Click below to view your neighborhood. 


Montgomery County Rental Market 

Median Rental Burden

According to the United States Census Bureau an estimated  34%  or 123,000 of occupied units are rental units. An estimated 23% of Montgomery County renters pay 50% or more over their income in monthly housing costs. Below the National Bench-marked Indicator for  Rental  Housing Burden can be seen, although their are counties with a much higher rental burden rate, Montgomery County has a large number of individuals that cannot afford Montgomery County Market rates for rent and strive to afford the most modest of rental units.

High Income = High Rents

The estimated Median Income of Montgomery County Maryland is ranked 15th in the nation in regards to median income, and ranks 9th (tied with Nassau County, NY) in highest median rent; (note: 830 of the 3,144 US counties have re-portable rental markets) .

United States Department of Housing and Urban Development categorizes Households by the percentage of the area median income, in 2015 the estimated area median income was $98,314
Extremely Low <=30% Income= <= $29,494
Very Low 50% Income = $49,157
Low 80% Income= $78,651
2015 Median Income= $98,314

Renting in the County, when you don't make $100k

According to the HUD Comprehensive Housing Affordability Strategy Data 2006-2013, over 25,000 rental households in the County pay 50% or more of their annual income in rent and other housing costs. 99% of households that fall into this 50%+ rental burdened category make less than $100,000 annually.

Rental Market Blueprint 

The Montgomery County Department of Housing and Community Affairs has under county code conducted an annual Housing Survey of all licensed multi Family Rental Facilities. The results from this survey provides insight into the County's rental market to better understand the needs and costs of living in the county.  The data presented below enables the county to plan effectively when progressively elaborating on the County's comprehensive strategy and goals in providing affordable housing. Note: Not all Facilities are presented below, those omitted were excluded due to both data validity and privacy purposes. 

Rental Facility Rent Rate Survey

The Department of Housing and Community Affairs, Licensing and Registration Unit, annually conducts a survey of all multi-family rental facilities in Montgomery County. The survey requests information about the number of vacant units on the first of April each year and tracks turnover rates and average rents. Facilities included are those located within Montgomery County's unincorporated areas as well as the municipalities of Rockville, Gaithersburg and Takoma Park. Click Below to explore more rental survey results.