Housing affordability continues to be an elusive commodity, as new first quarter data from RealtyTrac affirms that nine percent of U.S. county housing markets were less affordable than their historically normal levels, up from two percent of markets that exceeded historic home affordability levels a year ago.
In an analysis of 456 counties, 43 counties (nine percent) recorded an affordability index below 100 in the first quarter. The five most-populated county housing markets that were less affordable than their historic norms were Kings County, N.Y. (Brooklyn); Dallas County, Texas; New York County, New York (Manhattan); Alameda County, California in the San Francisco metro area; and Oakland County, Michigan in the Detroit metro area.
RealtyTrac also determined that the average wage earner needed to spend 30.2 percent of monthly wages in the first quarter to make monthly mortgage payments (including property taxes and insurance) on a median-priced home ($199,000). This marks a 26.4 percent increase from the average wages needed to buy a median-priced home in the first quarter of 2015.
“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,” said 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.”
