The Tri-Cities housing market has been no stranger to rising prices and tightening affordability in recent years. But the latest from the Atlanta Federal Reserve Bank’s Housing Affordability Tracker on county-level average monthly mortgage costs paints a stark picture in several counties where homeowners are spending far more than the traditional 30% affordability benchmark on housing. The report includes the average payment on the mortgage principal, interest, private mortgage insurance, and property taxes.  

Housing economists often cite the “30% rule” — the idea that households should spend no more than 30% of their gross income on housing costs. Exceeding that threshold can strain budgets and leave less room for savings, emergencies, and other essentials. There’s some argument that the more typical benchmark should be 35%. 

In our region, Scott County, VA, comes closest to the threshold at 32.2%. The rest are well above the line. Some are topping 50%. This means housing costs are consuming a disproportionate share of household income. 

At the top of the list is Unicoi County, where the average monthly payment is $2,369, eating up 52.9% of household income. That’s followed closely by Washington County, TN, at $2,482 and 49.1% of income.  

Washington County, VA, isn’t far behind, with an average monthly payment of $2,108 and 41.7% of income going to housing. Carter County is in a similar territory, with $1,865 per month, or 43.8% of income. 

For context, a household in Unicoi County making the median income would have to earn roughly $90,000 a year to get that $2,369 payment back under the 30% affordability threshold. The current Unicoi median income is $50,469. The current median family household income is $74,580. 

While affordable is relative to today’s market, a few counties in the region do stand out with somewhat lighter payment-to-income burdens. Scott County, VA, is the most affordable in the region with a $1,338 monthly payment, 32.2% of income. Bristol, VA, follows with $1,489 and 33.6% of income. 

Hawkins and Sullivan counties are in the mid-range. In Hawkins, the average payment is $1,789. That’s 36.9% of income on housing. In Sullivan, it’s $1,898 – 38.1% of income for housing.  

These affordability pressures are happening at a time when mortgage rates remain elevated, and wage growth is relatively slow. The result: fewer first-time buyers entering the market, more existing homeowners “locked in” to their lower-rate mortgages, and a growing number of households financially stressed by housing costs. 

For move-up buyers, the gap between what they can sell for and what they’ll pay for a new home is wider than ever. And for renters hoping to buy, the jump to a mortgage payment in today’s market can be prohibitive without a substantial down payment. 

Relief could come from a combination of factors: moderating home prices, lower interest rates, and stronger local wage growth. But for now, the data tells a clear story. A story that shows much of the Tri-Cities, homeownership costs are pressing hard against household budgets.