Thursday, September 24, 2020 / by Vanessa Saunders
By Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems Real Estate.
The latest Attom Data Solutions’ Home Affordability Report for the third quarter of 2020 concluded that the median home prices of single-family homes and condos are now less affordable than historical averages in 63 percent of U.S. counties. The increase is up from 54% one year ago. The raise is attributed to the skyrocketing demand for homes during the coronavirus pandemic. Third-quarter data from Attom revealed that those price increases have helped contribute to a significant decrease in affordability.
Todd Teta, chief product officer with Atom said in an accompanying statement, “In a year when nothing is normal, owning a single-family home has become less affordable to average wage earners across the U.S., despite conditions that would seem to point the opposite way. Wages are up and mortgage rates are down to rock-bottom levels, which should work in favor of homebuyers.”
Teta pointed out the anomaly of a failing economy causing an increase in buying activity. “Those same low mortgage rates, along with other factors, have led a lot of buyers into the market chasing a reduced supply of homes. The result is price hikes have raced past the impact of (declining) wages.”
The study found that in 52% of counties analyzed, third-quarter median home prices are up by at least 10 percent year over year. Home price appreciation has outpaced average weekly wage growth in a whopping 87 percent of counties analyzed.
Remarkably, one area where wage growth is outpacing home price appreciation included counties in and around New York City. Wage earnings increased over home prices in Kings County (Brooklyn), New York; Queens County, New York; New York County (Manhattan), New York; Bronx County, New York. The disparity possibly points to slower home price growth rather than rising wages as New York City area residents continue to move out to the suburbs.
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