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The
report found that home price growth exceeded wage growth in
nearly two thirds of the nation's housing markets so far this
year, with urban centers like San Francisco and New York City
among the least affordable.
Home prices in 9 percent of the U.S. housing market are now less
affordable than their historic norms, the report by RealtyTrac
found. Home buyers need to spend more of their incomes on
housing, leaving less money for other purchases.
"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, which monitors housing market trends.
RealtyTrac parsed homes sales and income data in 456 U.S.
counties with a combined population of 221 million.
The report comes after data showing house flipping, buying and
selling a house to make a quick profit in a hot housing market,
had risen to record levels in some markets, generating concerns
of a price bubble.
While the latest report could fuel those concerns, prices are
still far more affordable than during the peak of the housing
bubble in 2006. In the first quarter of this year the average
wage earner needed to spend a third of their income on monthly
mortgage payments compared to more than half in 2006.
In addition, RealtyTrac's affordability measure, which compares
house prices to wages, was above historic norms in 99 percent of
housing markets in 2006. After the housing bubble burst that
fell to a low of 2 percent in 2012 before rising to its current
9 percent.
Still, prices in highly sought after housing markets leave
average wage earners far behind, RealtyTrac said.
For example, to buy a median priced home in various areas of New
York City, Brooklyn and Manhattan especially, or in the San
Francisco metro area, a buyer needs to spend between 120 percent
and 95 percent of the average wage on mortgage payments.
Among populous areas where the growth in house prices
outstripped wage growth were Los Angles, Phoenix, and San Diego.
(Reporting by Edward Krudy; Editing by Daniel Bases and Tom
Brown)
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