VA loans are giving military households an edge in the housing market

Veterans spend only 10% of their income on mortgage payments compared to 16% for the average American household

VA loans are giving military households an edge in the housing market

Active-duty military and veteran households may have an advantage over other US households when it comes to affordable housing.

This is because VA loans may be giving them an edge in the housing market, according to Zillow's housing affordability outlook. Compared to conventional mortgages, VA loans offer lower rates, have more lenient credit requirements, and do not need private mortgage insurance.

“Taking advantage of benefits like VA loans can really pay off as well," said Zillow Group Economist Joshua Clark. "At current rates, a home buyer would save about $20,000 over the life of a loan on a typical home – and that's before factoring in other benefits of VA loans, such as not always requiring a down payment and limits on closing costs.”

Around 77% of active-duty homeowners and 58% of veteran homeowners take on VA loans, which bring the share of income spent on mortgage payments down to 12.6% for active-duty households and 10.2% for veterans.

That's 3% higher compared to the average US household, which would allocate 16% of its income on a mortgage payment for the median home.

Florida offers the greatest relative affordability for military households. And housing is reasonable for active-duty families in most metro areas except for a few large cities, including Seattle, San Diego, and Portland.

Mortgages are only unaffordable for active-duty military and veterans households in San Jose, the priciest housing market in the country.

"At a time when housing affordability is a real issue for so many, including public servants like teachers and firefighters, the outlook is encouraging in much of the country for current and former service members and their families," Clark said.