Mortgage

Share of counties where home affordability dropped hits 13-year high

Share of counties where home affordability dropped hits 13-year high
Written by Publishing Team

Atom Data Solutions found that more than three-quarters of the 575 US counties analyzed were less expensive than their historical average in the fourth quarter, as prices continued to climb to new highs.

Atom said the share of the 77 percent of counties where prices were above affordability is a 13-year high. That’s compared to 74% in the third quarter and just 39% in the fourth quarter of 2020.

Median single-family home prices in the fourth quarter increased at least 10% year-over-year in 368 or 64% of the counties analyzed.

Meanwhile, home prices rose faster than weekly wage growth for 78% of the counties examined.

Atom said the data was analyzed for counties with at least 100,000 residents and at least 50 single-family homes and condo sales in the fourth quarter.

Homes are still affordable for average wages, but prices are rising and Mortgage rates rise Todd Tata, Atom’s chief product officer, noted that a buyer’s financial comfort zone had been reduced.

“Historically low rates and rising wages remain key reasons why workers are meeting or very close to benchmark lending standards in the majority of the counties we analyze,” Tata said in a press release. “But the share of wages required for major property expenditures nationwide is approaching levels at which banks are less likely to make loans for home purchases.”

Atom found that the median national home price has risen 17% over the past year to a record $317,500.

However, ownership costs for median priced homes accounted for less than 28% of median local wages in 296 of the 575 counties analyzed, 51%, about the same as in the third quarter for the same group of counties, but down from about two-thirds in The fourth quarter of last year. This calculation takes into account the borrower making a down payment of 20% and using 28% in advance Debt to Income Ratio To obtain a matching mortgage.

The least affordable county based on its historical average with a population of over 1 million in the fourth quarter was led by Tarrant County (Fort Worth), Texas. Next was Maricopa (Phoenix), Arizona; Mecklenburg (Charlotte), North Carolina; and Hillsboro (Tampa), Florida. all considered Housing markets are hot for 2022.

At the other end of the scale, New York City’s Manhattan area, also known as New York District, was the most affordable district compared to its historical average in the fourth quarter.

Separately, Redfin, which has data looking at the four-week period ending December 26, puts the median home sales price at $361,171, up 14.6% from the same period in 2020.

new listings and outstanding sales Both fell to their lowest levels since January, and tourism activity was down compared to the same period in 2019 and 2020. Seasonality, not economics, was the reason for the drop in activity.

“We see this slowdown as a temporary consequence of the holidays, not as an indication of waning homebuyer demand,” Taylor Marr, Redfin’s deputy chief economist, said in a news release. “Those who bought homes during the holiday period paid high prices due to the constant shortage of supply,” he added.

At the same time, active listings — the number of homes for sale at any time during the period — fell 26.1% year over year to an all-time low, Redfin said. Compared to the pre-pandemic year of 2019, it has decreased by 44.8%.

The average sales-to-list ratio, which measures how close homes are selling to asking prices, was 100.4%. Over the four-week period, the median asking price for newly listed homes increased 12.9% from a year earlier to $345,348.

at the same time, Homes for sale It is cut quickly. The share of contracted homes that received an acceptable offer within one week was 29.6% and in the first two weeks after listing was 40.3%. Last year the rates were 25.3% and 35%, respectively.

The average time on the market shrank to 26 days, compared to 33 days in 2020 and 50 days in 2019.

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