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articles about “Inequality

America’s Most Unequal Metros

Income inequality is highest in Fairfield County, CT, San Francisco, New York, Boston, and Detroit. Overall, the most imbalanced U.S. metros tend to have worse housing affordability and slower job growth. But the trend is clear: the gap between the rich and poor has increased in 94 of the 100 largest metros since 1990 – and has even accelerated in the past few years.

Income inequality has been growing in America, driven by technology, globalization, and other factors. It’s caused tensions between the haves and have-nots, which often get played out at the local level, and these tensions have erupted into fights over housing affordability and public services.

Are growing income gaps limited to particular metros, or is this trend widespread? To untangle the facts about local income inequality, we compared the incomes of rich, median, and poor households in the 100 largest metros in 2012, 2006, 2000, and 1990, using Census data (see note below). A rich household is defined as being at the 90th percentile – which means being above 90% of all households in the metro; the median is at the 50th percentile, while poor is defined as at the 10th percentile. Our main inequality measure is the ratio of incomes at the 90th and 10th percentiles (the “90/10 ratio”), which shows the size of the gap between the rich and the poor. A higher value of the ratio means incomes are more unequal; among the 100 metros, the 90/10 ratio ranges from below 9 to above 18.

Taking this approach, we found that some metros are much more unequal than others, and the most unequal metros tend to have higher housing costs and slower economic growth. Despite these differences, income inequality has increased in nearly all metros over the past two decades and has accelerated in recent years.

Income Gap Widest in Fairfield County, San Francisco, and New York
The most unequal metro in America isn’t a well-known big city; it isn’t even bankrupt or overrun with rich tech workers. It’s Fairfield County, CT, home to the tony towns of Darien and Weston but also to the city of Bridgeport, where one third of children are below the official poverty level today and which tried to go bankrupt back in 1991. There, the 90th percentile of income is 18.5 times the 10th percentile. San Francisco, New York, Boston, and Detroit – which did successfully go bankrupt last year – round out the top five. Among the top 10 most unequal metros, four are in New England.

Where Income Inequality Is Highest

# U.S. Metro 90/10 ratio, 2012
1 Fairfield County, CT

18.5

2 San Francisco, CA

17.9

3 New York, NY-NJ

17.7

4 Boston, MA

16.2

5 Detroit, MI

15.2

6 Miami, FL

15.1

7 Philadelphia, PA

14.7

8 Springfield, MA

14.2

9 Peabody, MA

14.0

10 Toledo, OH

13.9

Note: the 90/10 ratio is the ratio of income at the 90th percentile to income at the 10th percentile, for a given metro. A higher ratio means greater income inequality. For the 90/10 ratio for the 100 largest metros, click here.

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Rising Prices Make Homeownership Affordability More Unequal Across the U.S.

Asking prices are up 16.3% year-over-year in America’s least affordable metros – far ahead of the overall national increase of 9.5%.

The Trulia Price Monitor and the Trulia Rent Monitor are the earliest leading indicators of how asking prices and rents are trending nationally and locally. They adjust for the changing mix of listed homes and therefore show what’s really happening to asking prices and rents. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do. With that, here’s the scoop on where prices and rents are headed.

Prices Up 9.5% Year-over-Year, and Rising in 98 of 100 Largest Metros

In May, asking home prices rose 1.1% month-over-month, seasonally adjusted. That’s slower than in previous months — asking prices rose 1.4% in each of February, March, and April (includes revisions) – but still at a very fast clip. Quarter-over-quarter, prices are up 4.0%, seasonally adjusted. Year-over-year, prices are up 9.5% nationally and are higher than one year ago in 98 of the 100 largest metros.

May 2013 Trulia Price Monitor Summary

% change in asking prices

# of 100 largest metros with asking-price increases

% change in asking prices, excluding foreclosures

Month-over-month,
seasonally adjusted

1.1%

Not reported

1.4%

Quarter-over-quarter,
seasonally adjusted

4.0%

94

4.5%

Year-over-year

9.5%

98

10.5%

 May Monitors Graph

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