WASHINGTON 鈥� Military veterans in the D.C. area have the highest median income among vets in the nation, and vets have a higher home ownership rate than the general population, but they are increasingly being squeezed out of Washington鈥檚 competitive and high-priced market.
Part of the problem is the VA loan, which offers vets incredible borrowing terms, but has become a hindrance in Washington鈥檚 extremely frothy housing market.
鈥淭hese loans are zero percent down and have low interest rates, and are a great entry market product for veterans,” real estate listing company Redfin鈥檚 Nela Richardson told 海角社区app.
鈥淏ut in these hot markets like D.C., we鈥檙e seeing all-cash buyers and we鈥檙e seeing people with significant amounts of money down. The more money a buyer puts down, the more wiggle room they have to escalate the price in a bidding war and all of this is contributing to a really tough environment to use a VA loan,” she said.
VA loans can also take longer to close than conventional loans, which also puts veteran homebuyers at a disadvantage in this fast-paced housing market.
The other hurdle facing Washington area vets is simply affordability.
The median annual income for a military vet in the Washington region is more than $73,000, according to Redfin. But that still makes the share of homes affordable for area vets just 19.6 percent, and that鈥檚 down 14.2 percentage points since 2012.
Home prices are up an average of 53 percent since 2012 in the metros Redfin looked at, but veterans鈥� median income is up less than 2 percent, so the disparity between what鈥檚 on the market and what a veteran can afford continues to grow.
There are still affordable markets for veterans, and the most affordable is not that far away.
鈥淰irginia Beach is the most affordable market for veterans, but (even there) there is a $125,000 gap between what a typical veteran in Virginia Beach can afford and what the list price of a typical home in Virginia Beach is and that鈥檚 a long way to go, even in the country鈥檚 most affordable metro for vets,鈥� Richardson said.
A military vet can afford, on his or her salary, on average 38.1 percent of the homes on the market in Virginia Beach. Memphis, Indianapolis, Louisville, Detroit and Baltimore are also at the top of the list for affordable housing markets for vets.
At the bottom of the list? San Jose, where Redfin calculates the share of homes affordable for local veterans is zero percent.
It is less than one percent in Portland, Phoenix, Denver, San Francisco and Los Angeles.
