Home Prices Outpace Wages in 80% of Cities
January 10, 2019
Wages are failing to keep pace with rising home prices, according to a new study from ATTOM Data Solutions, a real estate research firm. Median home prices increased faster than weekly wages in 601 of the 755 counties—80 percent of the markets that researchers analyzed in the report.
The markets that saw home prices outpace wage growth by some of the highest amounts were Los Angeles County, Calif.; Cook County (Chicago), Ill.; Harris County (Houston), Texas; Maricopa County (Phoenix), Ariz.; San Diego County, Calif.; Orange County, Calif.; and Miami-Dade County, Fla.
A separate housing affordability index from the National Association of REALTORS® showed the national family median income increased to $76,608 in the third quarter of 2018. However, housing affordability decreased from a year ago because of higher mortgage rates and higher home prices.
To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $64,480, while a 10 percent down payment would require an income of $61,086, and $54,299 would be needed for a 20 percent down payment.
“Aspiring middle-class home buyers continue to face affordability issues, as buyers are increasingly being priced out in the West while the rest of the country struggles, too,” Lawrence Yun, NAR’s chief economist, said in a statement about the study’s findings in November 2018.
On the other hand, there are market pockets where workers are finding more leverage. Many of those markets are in New York. Average weekly wages are rising faster than median home prices in 154 of the 755 counties analyzed, ATTOM’s study found. Some of those markets included Kings County (Brooklyn), N.Y.; Queens County, N.Y.; King County (Seattle), Wash.; Suffolk County, N.Y.; and Bronx County, N.Y.
Updated: January 18, 2019