Cost of living in Boston and the rest of Massachusetts is making it hard on median-income earners to live comfortably in the state, according to a recent study by GoBankingRates.com
The state may have one of the highest household incomes in the country, but its not enough to offset the expensive housing, healthcare and tax rates, the site said. It is the fourth-worst state for people living paycheck-to-paycheck.
Massachusetts residents have a median household income-per-paycheck of $2,716, according to GoBankingRate.com. But after cost of living expenses are factored in, an average resident’s remaining income is $361, meaning that only 13 percent of a resident’s paycheck is considered disposable income.
With so little leftover income, Massachusetts has one of the highest averages of residents living paycheck-to-paycheck, according to the site.
“Massachusetts has one of the highest household incomes in the country,” the report reads. “But high earnings might not be enough to escape the vicious paycheck-to-paycheck cycle.”
Housing costs to blame
Boston is one of the most expensive housing markets in the country, and the surrounding wealthy suburbs are no exception. As it turns out, housing costs throughout the state are enough to keep residents living paycheck-to-paycheck.
Homes in the state had a median listing price of $380,000 in November 2016, according to the site. That means that residents would have to pay about $1,260 per month for a mortgage. That’s about half of the median income-per-paycheck, meaning the average income earner would pay just under the 30 percent of monthly income threshold for housing, the marker that indicates cost-burdened buyers.
Beyond housing costs, Massachusetts residents also pay high healthcare costs, with the cost consuming about 8 percent of a resident’s paycheck.
This issue is known to many in the state, and civic leaders have attempted to solve the problem with more affordable housing. Despite those effort, it’s clear that Massachusetts is too expensive for many residents.