Homes Getting Less Affordable for Many
March 24, 2016
Housing is becoming increasingly unaffordable in many cities, a new report from RealtyTrac reveals. Their First Quarter 2016 Home Affordability Index shows that home price growth is exceeding wage growth in 61 percent of the nation's housing markets.
In the first quarter of this year, average wage earners would need to spend about 30.2 percent of their monthly pay in order to afford mortgage payments on a median-priced home. Last year earners on average would need to spend 26.4 percent of their monthly wages.
Dig deeper into housing affordability: NAR's Housing Affordability Index
“While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets,” says Daren Blomquist, senior vice president at RealtyTrac. “The recent drop in interest rates has helped to soften the blow of high-flying price appreciation in some markets, but the affordability equation could change quickly if interest rates trend higher and home prices continue to rise faster than wages.”
These metro areas are the least affordable compared to their historic norms:
- New York City
- Omaha, Neb.
- Austin, Texas
- San Francisco
- St. Louis, Mo.
On the flip side, these metro housing markets are the most affordable compared to their historic norms:
- Birmingham, Ala.
- Providence, R.I.
Updated: July 17, 2018