Buying a home hasn’t been this hard in over a decade.
A new home affordability study from Attom Data Solutions finds that housing prices in the U.S. during the first quarter were at their least affordable levels since the third quarter of 2008.
That doesn’t mean prices are quite at the levels of the real estate bubble, though. Instead, Attom’s affordability index is based on the percentage of income that’s needed to buy a median-priced home.
Rising mortgage rates are partially to blame, but the real culprit is appreciation, even if that has slowed recently.
“Home price appreciation continued to outpace wage growth, speeding up the affordability treadmill for prospective homebuyers even without the rise in mortgage rates,” said Daren Blomquist, senior vice president at Attom Data Solutions.
Home prices increased faster than wages in 64% of local markets, including several areas in California as well as Miami-Dade County in Florida. But they were least affordable in the areas surrounding Flint, MI; Denver, Co; Santa Fe, NM; and Nashville, TN.
The result? In 75% of the local markets Attom surveyed, it found that average wage earners in that city could not afford to buy a median-priced home. (The state with the most affected cities, not surprisingly, was California.)
One of the most affordable areas, surprisingly? The Northeast corridor. Many markets between Delaware and Rhode Island had better than average affordability, says Attom