HOUSING STRATEGY CONVERSATIONS

1. Pilot innovative housing and redevelopment approaches. 2. Enhance housing affordability and explore innovative financing options. 3. Strengthen economic development and workforce capacity. 4. Support and expand senior housing options.

CITY OF ARLINGTON | Grants Management Annual Report 2025 43

This analysis determines the required annual income needed to afford a home across different price ranges, excluding homeowners insurance. The calculations follow standard mortgage lending guidelines and affordability rules. Based on 365 days of listings from Jan 1, 2024 to Dec 31, 2024. A total of 3,393 listings were used in this analysis.

• Loan Type: Conventional Loan

• Loan Term: 30 Years( 360 months)

• Loan Interest Rate: 6.25 %( Annual)

• Annual Property Tax Rate: 1.82 % of home price

• Down Payment: 20 % of home price

• Annual PMI Rate: 0.5 % of loan amount

• Front-End DTI Ratio: 28 %( Housing expenses should not exceed 28 % of gross monthly income)

KEY ASSUMPTIONS & RATES

Low Affordability Household Shifts to Higher

Household Affordability Category

The image shows how much more income you need The to image move up illustrates to increase how housing much additional income, expressed as opportunities a percentage. The biggest, is required jumps happen to move at up level and increase housing lower income opportunities levels, making. The biggest it challenging percentage jumps occur at lower for people income with lower levels incomes, making to it move challenging up. for those with lower incomes But as income increases, moving up becomes

to keep easier

up. with rising home prices and compete for available housing options. However, as income increases, the percentage increase needed to move up becomes smaller, easing the shift and allowing buyers to remain competitive in the market and access different housing opportunities.

19 %

• Backend DTI Ratio: 36 %( Total debt obligations should not exceed 36 % of gross income)

• Home Price Ranges: $ 90,000 to $ 2,500,000 +

• Affordability Categories: Based on HUD’ s Areas Median Income( AMI) framework for a household family of four.

15 %

TOTAL LISTINGS Jan 1, 2024- Dec 31, 2024

12 %

11 %

19 %

Number of listings in category

28 %

28 %

24 %

81 %

61 %

Required Income $ 26,425

1 2660 951 1,268 524 241 67 35 26 17 32

Required Income $ 47,914

Required Income $ 76,953

Required Income $ 98,732

Required Income $ 126,319

Required Income $ 156,809

Required Income $ 187,271

Required Income $ 215,759

Required Income $ 242,475

Required Income $ 268,610

Required Income $ 319,486

Low Affordability Income <$ 81,500

Moderate Affordability Income $ 81,500- $ 122,280

High Affordability Income >$ 122,280

HIGHER INCOMES, GREATER HOUSING OPPORTUNITIES