Oct 17, 2017 – US annual cost of housing

Oct 17. 2017.

The biggest cut from your pay check. US annual cost of housing, 2016.

US households spend one-third of their paycheck on housing, and the biggest expenses are mortgage, utilities, interest & property tax–in that order.

Annual cost of housing

On an average, a US household spends $1574 on housing every month. This includes everything one needs to live in house: from mortgage to furniture to phone bills. The biggest part–almost two-third–of this bill is paying for the loan taken on the mortgage. The next big expenses are paying for utilities, which includes electricity, water, sewerage, etc.

Taking the average of all housing across US, two-third of the dwelling expenses are related to owning a home & one-third for rents. This is consistent with the fact that average US home ownership is about 63%.

A monthly property tax of $164, mortgage interest of $241, and insurance plus maintenance expenses of $120 make owning a house less appealing. In shared dwellings, charges of home owner’s associations further discourage young families to own their own homes.

This data also shows that on an average, a US household spends almost $240 a month on phone, internet and related cable connections.

Although US annual cost of housing varies significantly across the country, this chart is a good benchmark to compare your numbers against the average expenses for 125 million households during 2016.

Source: www.bls.gov: Consumer expenditure survey (data in .pdf format.xlsx format) Oct 12th, 2017.

Disclaimer: Written with heavy dose of coffee :). Let Amazon pay for my coffee, make your next Amazon purchase by going through the links here (Amazon pays small fraction of any purchase you make through this page within 24 hours).

 

Previous charts-of-the-day:

Oct 18, 2017 – US annual household food expenditure, 2016

Oct 17, 2017 – US annual cost of housing, 2016

Oct 16, 2017 – US annual household expenses, 2016

Oct 15, 2017 – US manufacturing employment and output, 1980-2017

Oct 14, 2017 – Oregon weekly wages by counties, Oct-Dec 2016

Oct 13, 2017 – Ratio of women’s wages compared to men since 1979

Oct 12, 2017Career change after age 40, AIER 2015

Oct 11, 2017 – Average time spent per day on primary activities, 2016 annual average

Oct 10, 2017Home price comparison for US, Canada, UK & Australia, 1980-2017

Oct 09, 2017 – California state best paying jobs by cities – Part II, May 2016

Oct 08, 2017 – California state best paying jobs by cities – Part I, May 2016

Oct 07, 2017Washington state top cities & jobs, May 2016

Oct 06, 2017Oregon top cities & jobs, May 2016

Oct 05, 2017Employment rate participation – 1990-2010 & projected 2020

Oct 04, 2017Employment by metro, Aug 2016 – Aug 2017

Oct 03, 2017 – Top ten employers in CA, OR, WA states

Oct 02, 2017California based companies with revenues over $10 billion

Oct 01, 2017Oregon based companies with revenues of over $1 billion

Sep 30, 2017 – US population growth (%) by state, 2013-2016

Sep 29, 2017 – Top US industries by growth, 2012-2015

Sep 28, 2017 – no chart

Sep 27, 2017 – San Francisco metro growth by select industries, 2012-2015

Sep 26, 2017 – San Jose metro growth by select sectors, 2012-2015

Sep 25, 2017 – Austin metro growth rates by select industries, 2012-2015

Sep 24, 2017 – Growth by Industry in Seattle Metro (King county, WA) and Vancouver (Clark county, WA; Portland Metro), 2012-2015

Sep 23, 2017Growth by Industry in Portland Metro (Multnomah & Washington counties), 2012-2015

Sep 22, 2017 – Earning growth (%) by industries for Oregon, Washington & California in Q1, 2017

Sep 21, 2017 – Median 1-,2-,3-BDR rent prices in Denver, Seattle & Los Angeles, Aug 2017

Sep 20, 2017 – Median rent prices in Silicon Valley for 1-,2-,3-bedroom, Aug 2017

Sep 19, 2017 – Estimated Gross State Product for US states, 2017

Sep 18, 2017Gross Metro Product for top 25 US metros, 2016

Sep 17, 2017 – Median 1-bedroom & 2-bedroom rent prices for Austin, Denver & Portland Metros, July 2017

Sep 16, 2017 – Median rent in San Francisco, July 2017

Sep 15, 2017 – Median rent in San Jose, July 2017

Sep 14, 2017 – Rate of inflation in India, 2014-2017

Sep 13, 2017 – Circulation of US dollar (2011) and Indian rupees (Mar 2017)

Sep 12, 2017 – Amount of US dollar in circulation (1984-2017)

Sep 11, 2017 – US annual population growth by race (2010-2016)

Sep 10, 2017 – US population by race (2010-2016)

Sep 09, 2017 – no chart

Sep 08, 2017Digitization in India, total transactions

Sep 07, 2017 – Cash circulation in India post demonetization

Sep 06, 2017 – Foreign direct investment to India (2012-2017)

Sep 05, 2017 – no chart

Sep 04, 2017US productivity change (percent, non-farm businesses, by year, 2000-2016)

Sep 03, 2017Unemployment rate & labor participation rates, 1997-2017

Sep 02, 2017 – Earnings of men & women, up to 2015

Sep 01, 2017 – US household income trend, 2015

Aug 31, 2017Projected growth in fastest growing occupations, 2014-2024

Aug 30, 2017 – US median salaries for fastest growing occupations in next 10 years, 2016

Aug 29, 2017 – US household – time spent in daily chores, 2016

Aug 28, 2017 – US household leisure & sports time, 2016

Aug 27, 2017 – Peak earning vs age, 2010-2016

Aug 26, 2017Price change for TVs, Computer, Internet, Cable & Software, 1996-2015

Aug 25, 2017Number of rental units in Silicon Forest, Tanasbourne, Portland Metro

Aug 24, 2017 – Vacancy rates, for rental & homeowner houses (1980-2015)

Aug 23, 2017Rate of homeownership & number of renters, 1990-2015

Aug 22, 2017 – Comparison of $100k with mortgage vs S&P vs rent, $100k from Jan 2010 to Jun 2017

Aug 21, 2017 – no chart

Aug 20, 2017 – Construction productivity vs other industries (The Economist)

Aug 19, 2017 – no chart

Aug 18, 2017 – no chart

Aug 17, 2017 – Worth of money in parallel worlds (with housing leverage), $100k from Jan 2010 to Jun 2017

Aug 16, 2017 – no chart

Aug 15, 2017 – Worth of money in parallel worlds (long term trend), starting with $100k in Jun 1996

Aug 14, 2017 – Worth of money in parallel worlds, value of $100k invested in Jan 2010 worth in Jun 2017

Aug 13, 2017 – US consumer price index (cost-of-living index or inflation) – (2007-2017)

Aug 12, 2017 – US unemployment rate & wage growth (2010-2017)

Aug 11, 2017 – US home price change by state (1976-2017 & 2016-2017)

Aug 10, 2017 – Inflation plotted with US Treasury & Mortgage rates (2010-2016)

Aug 9, 2017 – US Treasury and Mortgage rates (2010-2016)

Aug 8, 2017 – Household credit score versus time (2001-2016)

Aug 7, 2017 – Monthly mortgage payment across key US metro regions (2012-2016)

Aug 6, 2017 – Good time to buy or good time to sell? Fannie Mae’s monthly Home Purchase Sentiment Index (R)

Aug 5, 2017 – Buy versus Rent – Trulia’s calculator (Apr 2017)

Aug 4, 2017 – Annual change in US home prices across top 20 cities (May 2011- May 2017)

Aug 3, 2017 – Best time to get a deal: time period when best discounts are available in housing market

Aug 2, 2017 – Clark County, Washington state (Portland Metro area, OR) single family home prices (2012-2017)

Aug 1, 2017 – Multnomah County (Portland Metro area, OR) single family home prices (2012-2017)

July 31, 2017 – Washington County (Portland Metro area, OR) single family home prices (2012-2017)

July 28, 2017 – US home prices 1890-present

July 27, 2017 – Median house price for Portland Metro neighborhoods

July 26, 2017 – Average rent for Portland Metro region

July 25, 2017 – Path of total solar eclipse through Oregon

July 24, 2017 – Portland metro area household income by region

Oct 16, 2017 – US annual household expenses

Oct 16, 2017.

How do your expenses add up? US annual household expenses for key items, 2016.

Out of the annual expenditure of $57,311, housing makes up almost a third of household expenses followed by transportation (16%) and food (13%).

US annual household expenses

After paying taxes, US households spend almost all of their annual income of $57,319 mainly in housing, food & transportation. A third of this income goes into paying for housing. Although majority of this expense is for paying mortgage, a third is paid in interest, insurance, taxes, utilities, and other housing expenditure when averaged across all the 125 million households.

The average monthly household expense on housing is $1,574.

At an average of 1.9 vehicles per household, Americans spend one in every seven dollars for transportation. Half of this is to buy their vehicles and other half goes into, gas (3.3% of total), insurance (1.5%), and maintenance (1.5%). The expenses on public transport at minuscule at 1.1% (or $623 per household). This shouldn’t be a surprise since US has one of the lowest spending on public transport compared to other developed nations.

Most of the world’s population spends a large part of their income on food, but a US household barely spends a tenth of their income on eating. In highly subsidized food and dairy industries, states across the country have tried to control the grocery prices through low taxes, farmer subsidies, and strong competition.

Although healthcare is a hotly debated issue, the average expense is about 8%, varying from 3.4% for younger population (below 25 years) to 15.4% for those above 75 years.

Other major US annual household expenses are in entertainment ($3k), clothing ($1,803), education ($1,329), and personal care ($707). Those below the age of 25 years spend almost 9% of their income on education. But other major expenses are pretty well distributed across different age groups. This should serve as a good template for every family to see how their income leaks out of their wallets.

Source: www.bls.gov: Consumer expenditure survey (data in .pdf format.xlsx format) Oct 12th, 2017.

Disclaimer: Written with heavy dose of coffee :). Let Amazon pay for my coffee, make your next Amazon purchase by going through the links here (Amazon pays small fraction of any purchase you make through this page within 24 hours).

 

Previous charts-of-the-day:

Oct 18, 2017 – US annual household food expenditure, 2016

Oct 17, 2017 – US annual cost of housing, 2016

Oct 16, 2017 – US annual household expenses, 2016

Oct 15, 2017 – US manufacturing employment and output, 1980-2017

Oct 14, 2017 – Oregon weekly wages by counties, Oct-Dec 2016

Oct 13, 2017 – Ratio of women’s wages compared to men since 1979

Oct 12, 2017Career change after age 40, AIER 2015

Oct 11, 2017 – Average time spent per day on primary activities, 2016 annual average

Oct 10, 2017Home price comparison for US, Canada, UK & Australia, 1980-2017

Oct 09, 2017 – California state best paying jobs by cities – Part II, May 2016

Oct 08, 2017 – California state best paying jobs by cities – Part I, May 2016

Oct 07, 2017Washington state top cities & jobs, May 2016

Oct 06, 2017Oregon top cities & jobs, May 2016

Oct 05, 2017Employment rate participation – 1990-2010 & projected 2020

Oct 04, 2017Employment by metro, Aug 2016 – Aug 2017

Oct 03, 2017 – Top ten employers in CA, OR, WA states

Oct 02, 2017California based companies with revenues over $10 billion

Oct 01, 2017Oregon based companies with revenues of over $1 billion

Sep 30, 2017 – US population growth (%) by state, 2013-2016

Sep 29, 2017 – Top US industries by growth, 2012-2015

Sep 28, 2017 – no chart

Sep 27, 2017 – San Francisco metro growth by select industries, 2012-2015

Sep 26, 2017 – San Jose metro growth by select sectors, 2012-2015

Sep 25, 2017 – Austin metro growth rates by select industries, 2012-2015

Sep 24, 2017 – Growth by Industry in Seattle Metro (King county, WA) and Vancouver (Clark county, WA; Portland Metro), 2012-2015

Sep 23, 2017Growth by Industry in Portland Metro (Multnomah & Washington counties), 2012-2015

Sep 22, 2017 – Earning growth (%) by industries for Oregon, Washington & California in Q1, 2017

Sep 21, 2017 – Median 1-,2-,3-BDR rent prices in Denver, Seattle & Los Angeles, Aug 2017

Sep 20, 2017 – Median rent prices in Silicon Valley for 1-,2-,3-bedroom, Aug 2017

Sep 19, 2017 – Estimated Gross State Product for US states, 2017

Sep 18, 2017Gross Metro Product for top 25 US metros, 2016

Sep 17, 2017 – Median 1-bedroom & 2-bedroom rent prices for Austin, Denver & Portland Metros, July 2017

Sep 16, 2017 – Median rent in San Francisco, July 2017

Sep 15, 2017 – Median rent in San Jose, July 2017

Sep 14, 2017 – Rate of inflation in India, 2014-2017

Sep 13, 2017 – Circulation of US dollar (2011) and Indian rupees (Mar 2017)

Sep 12, 2017 – Amount of US dollar in circulation (1984-2017)

Sep 11, 2017 – US annual population growth by race (2010-2016)

Sep 10, 2017 – US population by race (2010-2016)

Sep 09, 2017 – no chart

Sep 08, 2017Digitization in India, total transactions

Sep 07, 2017 – Cash circulation in India post demonetization

Sep 06, 2017 – Foreign direct investment to India (2012-2017)

Sep 05, 2017 – no chart

Sep 04, 2017US productivity change (percent, non-farm businesses, by year, 2000-2016)

Sep 03, 2017Unemployment rate & labor participation rates, 1997-2017

Sep 02, 2017 – Earnings of men & women, up to 2015

Sep 01, 2017 – US household income trend, 2015

Aug 31, 2017Projected growth in fastest growing occupations, 2014-2024

Aug 30, 2017 – US median salaries for fastest growing occupations in next 10 years, 2016

Aug 29, 2017 – US household – time spent in daily chores, 2016

Aug 28, 2017 – US household leisure & sports time, 2016

Aug 27, 2017 – Peak earning vs age, 2010-2016

Aug 26, 2017Price change for TVs, Computer, Internet, Cable & Software, 1996-2015

Aug 25, 2017Number of rental units in Silicon Forest, Tanasbourne, Portland Metro

Aug 24, 2017 – Vacancy rates, for rental & homeowner houses (1980-2015)

Aug 23, 2017Rate of homeownership & number of renters, 1990-2015

Aug 22, 2017 – Comparison of $100k with mortgage vs S&P vs rent, $100k from Jan 2010 to Jun 2017

Aug 21, 2017 – no chart

Aug 20, 2017 – Construction productivity vs other industries (The Economist)

Aug 19, 2017 – no chart

Aug 18, 2017 – no chart

Aug 17, 2017 – Worth of money in parallel worlds (with housing leverage), $100k from Jan 2010 to Jun 2017

Aug 16, 2017 – no chart

Aug 15, 2017 – Worth of money in parallel worlds (long term trend), starting with $100k in Jun 1996

Aug 14, 2017 – Worth of money in parallel worlds, value of $100k invested in Jan 2010 worth in Jun 2017

Aug 13, 2017 – US consumer price index (cost-of-living index or inflation) – (2007-2017)

Aug 12, 2017 – US unemployment rate & wage growth (2010-2017)

Aug 11, 2017 – US home price change by state (1976-2017 & 2016-2017)

Aug 10, 2017 – Inflation plotted with US Treasury & Mortgage rates (2010-2016)

Aug 9, 2017 – US Treasury and Mortgage rates (2010-2016)

Aug 8, 2017 – Household credit score versus time (2001-2016)

Aug 7, 2017 – Monthly mortgage payment across key US metro regions (2012-2016)

Aug 6, 2017 – Good time to buy or good time to sell? Fannie Mae’s monthly Home Purchase Sentiment Index (R)

Aug 5, 2017 – Buy versus Rent – Trulia’s calculator (Apr 2017)

Aug 4, 2017 – Annual change in US home prices across top 20 cities (May 2011- May 2017)

Aug 3, 2017 – Best time to get a deal: time period when best discounts are available in housing market

Aug 2, 2017 – Clark County, Washington state (Portland Metro area, OR) single family home prices (2012-2017)

Aug 1, 2017 – Multnomah County (Portland Metro area, OR) single family home prices (2012-2017)

July 31, 2017 – Washington County (Portland Metro area, OR) single family home prices (2012-2017)

July 28, 2017 – US home prices 1890-present

July 27, 2017 – Median house price for Portland Metro neighborhoods

July 26, 2017 – Average rent for Portland Metro region

July 25, 2017 – Path of total solar eclipse through Oregon

July 24, 2017 – Portland metro area household income by region

Oct 18, 2017 – US annual household food expenditure

Oct 18, 2017.

Cheap and plentiful. US annual household food expenditure, 2016.

On an average, a US household spends $600 on food per month, almost half of which goes in eating out.

us annual household food expenditure

Out of the $57,311 annual expense for an American household, only about 13% ($7,203) is spent on food. Every month, the 125 million US households spend on an average of $600 on food.

That’s relatively low compared to developing countries where a significant income goes in feeding the family. In fact, the bigger expenses for a family are housing ($18,886) and transportation ($9,049).

US also has a strong culture of eating out and almost 45% of the expenses go into eating outside their own home. Even when eating at home, almost a third of the food is either pre-cooked or packaged.

As would be expected for a western country, the expenditure in eating meat (almost 12%) is higher than vegetables (10%) and twice as much as dairy products (5%). Beef is the most popular meat, and one of the biggest industry supported by the great plains of the western and mid-west United States.

The US annual household food expenditure data suggest Americans spend only about 3% of the food expenses on sugar & oil. However, a significant amount of calories in the food outside home come from these high calorie ingredients. Most popular among these sources are carbonated drinks.

It is very common to find added sugar in almost everything in United States, including yoghurt, fruit juice, and bread. These ‘cheap’ calories are under intense debate due to very high ratio of population facing obesity and overweight problems. As previous data suggested, almost 8% of the household expense goes into paying for healthcare.

Ten percent of the food expenditure goes in beverages, although less than half of it is related to alcoholic beverages. The use of alcohol peaks around age 30, slightly higher than other western countries due to a higher drinking age limit of 21 years.

This data is a good reference for those looking to compare their own expenses against the US average in 2016.

Source: www.bls.gov: Consumer expenditure survey (data in .pdf format.xlsx format) Oct 12th, 2017.

Disclaimer: Written with heavy dose of coffee :). Let Amazon pay for my coffee, make your next Amazon purchase by going through the links here (Amazon pays small fraction of any purchase you make through this page within 24 hours).

 

Previous charts-of-the-day:

Oct 17, 2017 – US annual cost of housing, 2016

Oct 16, 2017 – US annual household expenses, 2016

See more charts at the home page.

Austin, TX – growth by select industries, 2012-2015

The rising star that’s still affordable. Austin metro growth rates by select industries, 2012-2015.

Economic growth in austin

This data for select industries in Austin metro region–spanning Bastrop, Caldwell, Hays, Travis, and Williamson Counties–shows impressive growth in some of the high paying industries. With houses still much more affordable compared to other fast growing metros (of Seattle, Denver & Portland as well as California), Austin is expected to be next top destination for the young and qualified. Eight out of top ten industries are in technology & management, which is very different from what we see in Seattle & Portland. In these regions, Tech and management sectors are competing with hospitality and housing for top spots.

The housing market in Austin lagged behind other fast growing regions & was one of the slowest growing sector in 2015. Therefore, even today, one should expect more affordable housing in Austin than any other west coast big city. With wage growths higher than Portland and Seattle, Austin should expect more employees from across the country. Despite ten years of solid economic growth in US, wage growth has barely nudged above 3%; a three fold rate of increase is expected to draw attention across the nation.

The farming industry is relatively small and therefore tends to have larger growth swings.

Source: Bureau of Economic Analysis (table: CA5N: Personal Income by Major Component and Earnings by NAICS Industry under Local Area Personal Income accounts).

Disclaimer: Written with heavy dose of coffee :). Let Amazon pay for my coffee, make your next Amazon purchase by going through the links here (Amazon pays small fraction of any purchase you make through this page within 24 hours).

Previous charts-of-the-day:

Sep 24, 2017 – Growth by Industry in Seattle Metro (King county, WA) and Vancouver (Clark county, WA; Portland Metro), 2012-2015

Sep 22, 2017 – Earning growth (%) by industries for Oregon, Washington & California in Q1, 2017

Sep 21, 2017 – Median 1-,2-,3-BDR rent prices in Denver, Seattle & Los Angeles, Aug 2017

Even older charts …

Re-monetisation of Indian Rupee

Not that easy to disrupt the black money. 99% of the cancelled Indian banknotes are now accounted for. But did the side effect of demonetization result in more digitization?

Indian currency in circulation
Fig 1. Total Indian Rupees in circulation (The Economist, Sep 2nd, 2017). Big dip is due to demonetization, but still lower than a peak of Oct 2017 due to several efforts by government to discourage cash transactions.

When the Indian government cancelled the high denomination notes on Nov 8, 2016, one of the goal was to get a quick windfall from money that won’t be returned. And it made sense. Those hoarding cash had to bring it back and explain their source. High net worth income individuals and Indian wives, famous for keeping their cash under carpet, were not expected to return a significant part of their hoard. The government planned to re-print these missing notes & count them as their own money, allowing it to indirectly transfer this ‘black money’ from hoarders to the Indian taxpayer.

However, the Reserve Bank of India reported on Aug 30 that 99% of the notes have been received back. The RBI annual report (page 195) says that 15.28 trillion rupees ($241 million) out of the 15.4 trillion rupees withdrawn from circulation have been returned back to the banks. The original expectation was between 3 and 25%, thus giving the government a big windfall. Either people didn’t hoard large cash, which is highly unlikely for a cash based economy, or they managed to return it back despite careful monitoring by the government.

This demonetization effort was heavily criticized by experts and resulted in big pains for the Indian consumer and economy. Businesses came to stand still for months while people lined up at ATMs to withdraw their minimum daily cash allowance.

One of the key outcome of this exercise was the strong focus on digitization of the Indian economy. The government launched several efforts to make the economy less dependent on cash. The data below gives an assessment of how these efforts have fared. The percentage growth is impressive, but the absolute numbers are still pretty low.

India digital payments
Fig 2. Total annual transactions in Billion Rupees ($1 is about 65 Indian Rupees, Sep 2017). Despite continuous growth, the overall numbers remain pretty small.

Looking at the total paper transactions, there is a steady drop of about 5% over last two years. The retail electronic transitions have almost doubled in past two years suggesting businesses are more open to accept electronic payments. However, the credit card payments are still pretty low, almost 5% of all known retail transactions.

Indian economy is highly unregulated and these numbers from RBI tell only a small part of the full story. Majority of Indian consumers shop at small mom and pop stores that buy their goods from larger wholesale stores, which are in essence dealers of large corporations. This supply chain, developed by the large manufacturers & multinationals, is strangely very efficient in delivering good. But most transactions are cash based & rarely use a paper trail of documentation. Therefore, majority of transactions do not appear in any reports. Government’s efforts to digitize the economy not only provides a proper documentation of these transactions, it brings them to the wider tax system. However, India is still a long way from anything close to developed economies like US or Europe.

There are few dramatic changes going on for Indian consumer. The recent surge in e-commerce has penetrated deep into India including rural markets. Heavy competition between Amazon & local giants like Flipkart & Snapdeal has benefited the average consumer. Additionally, the growth in smart phones and 4G internet, led by Reliance Jio, has connected a large number of consumers to global market although their purchasing power is nowhere close to western economies or China. To paraphrase Jack Ma of Alibaba: the biggest story of previous century was selling to US consumers; this century will be about selling to China. Very soon, this story will include India. And market forces will decide this future growth despite government cameos like demonetization and Digital India.