Written by Janet Harrah, the senior director of the Center for Economic Analysis and Development in the Haile College of Business at Northern Kentucky University

Housing affordability has emerged as a critical issue in Northern Kentucky, where home prices continue to outpace wage growth, leaving many residents—especially essential workers—struggling to achieve the American Dream of homeownership.

Current data show wide disparities in median home prices across Boone, Campbell, and Kenton counties, ranging from $255,000 to $330,500, while median household incomes lag. This situation raises a critical question: Which occupations can realistically afford homeownership in this challenging market? Using the 30% rule—where no more than 30% of gross income should go toward housing costs—this article examines the financial realities faced by Northern Kentucky’s workforce.

As illustrated in Table 1, the wide range in home prices across Boone, Campbell, and Kenton counties shows how location plays a major role in determining housing affordability.

Table 1:  Income and Home Prices, Northern Kentucky

Data sources:  U.S. Census Bureau and Northern Kentucky Multiple Listing Service, Inc. *Median household income and median price of homes sold for Boone, Campbell, and Kenton counties combined for NKY were weighted and calculated by CEAD.  

A household must earn at least $69,920 annually to afford a median-priced home in Northern Kentucky, which is currently $291,720.  This follows the rule that no more than 30% of your income should go toward housing costs. Those exceeding this limit are considered “housing cost-burdened,” leaving less income for other essentials like food, healthcare, and savings.

Before delving into the specifics of housing affordability in Northern Kentucky, it’s crucial to understand how we measure and calculate these figures. The following section breaks down the mathematics behind homeownership costs, providing a foundation for our subsequent analysis of affordability across different occupations. By walking through this step-by-step process, we can better grasp the financial realities faced by prospective homeowners in our region. This detailed look will set the stage for how various professions fare in today’s challenging housing market.

The Math Behind Affording a Home in Northern Kentucky

Here’s a step-by-step breakdown of what it takes to afford the median home price of $291,720 based on our 30% affordability rule:

1. Monthly mortgage payment:  $1,475

• Based on a 30-year fixed rate mortgage at 6.5% 

2. Additional Monthly Costs

• Property Taxes: $207
• Homeowners Insurance: $66 

3. Total Monthly Housing Costs:  $1,748

• Includes mortgage, taxes, and insurance 

4. Following the 30% rule, a household must earn at least $69,920 to afford a median-priced home of $291,720 without becoming housing cost-burdened

Chart 1 illustrates how mortgage payments, property taxes, and homeowners’ insurance contribute to monthly housing costs. The most significant portion is typically the mortgage payment, followed by property taxes and insurance.

Chart 1:  Breakdown of Monthly Housing Costs  

The gap between median income and the income required for homeownership is crucial to housing affordability. Chart 2 compares these figures across Northern Kentucky:

Chart 2:  Median Income vs. Required Income for Home Ownership in NKY

Data sources:  U.S. Census Bureau. *Median household income for Boone, Campbell, and Kenton counties combined for NKY were weighted and calculated by CEAD.  

This chart shows that while median incomes in Northern Kentucky make homeownership feasible, many households and single-income earners still struggle to keep up with the rising cost of living.  

Understanding the Housing Affordability Index (HAI)

A metric called the Housing Affordability Index (HAI) is often used to measure house affordability (see Chart 3).

The HAI measures whether a typical household can afford to buy a home. A score of 100 means a family can afford a house at the median price.  In contrast, a score below 100 indicates that the median income is not sufficient to afford a median-priced home without becoming housing cost-burdened.

Housing Affordability by Occupation

Now that we’ve broken down the costs of homeownership, let’s look at how these costs impact different professions in Northern Kentucky.  

For many working in Northern Kentucky, affording a median-priced home without exceeding the 30% rule may be challenging. Let’s look at how various occupations in the region measure up against this affordability standard.  Why look by occupation?  

Given that nearly 30% of adults In Northern Kentucky live alone and many households rely on a single paycheck, assessing home affordability by occupation becomes critical to understanding the challenges residents face.  

We started with the U.S. Bureau of Labor Statistics data on median annual earnings by occupation. These data on 630 occupations are organized into 23 major occupational groups. 

As shown in Chart 3, workers in high-paying fields like management and technology can easily afford a home.  Still, those in lower-paying jobs—such as food preparation and office support—are far below the affordability line.

Chart 3:  Housing Affordability by Occupational Group, Northern Kentucky

Of the 630 detailed occupations, just 177, or 28% have a housing affordability index of 100 or more.  As we discussed earlier, an HAI of 100 means a household can comfortably afford a median-priced home.  Thus, a large percentage of jobs fall short of making homeownership feasible for many single-income households. This highlights a growing challenge for lower-paying jobs, even within essential fields like education, healthcare, and public safety, where wages often don’t align with rising housing costs.

While high-paying occupations like management and legal jobs comfortably exceed the affordability threshold, healthcare support, transportation, and food service workers face serious affordability challenges, with HAI scores often well below 100.

Table 2:  Housing Affordability Index by Occupational Group

Data source:  U.S. Census Bureau, Northern Kentucky LMS; HAI calculated by CEAD.  

Implications

The considerable disparity between high and low-paying occupations illustrates the stark contrast in housing affordability within the region. Occupations such as food preparation and serving-related jobs fall at an HAI of 42.3, highlighting severe challenges in these fields.

Historically, professions such as teaching and nursing have provided a gateway to middle-class stability. However, with a Housing Affordability Index of just 88.1, a middle school teacher in Northern Kentucky falls short of the affordability threshold.  The same is true for firefighters, with an HAI of 74.1; childcare workers with an HAI of 41.7; and licensed practical nurses, with an HAI of 85.6.  

If current trends continue, Northern Kentucky risks becoming unaffordable for the very workers who keep the region running. The real question is: How do we ensure that the teachers, nurses, and firefighters who support our communities can afford to live here? Without meaningful solutions, the region may soon become a place where only the wealthiest can afford to live, leaving many essential workers priced out of the American Dream.