The second Quarter of 2016 has seen an increase in less affordability levels compared to the first quarter of 2016 in the U.S. housing market. According to a study done by RealtyTrac, only 22 counties out of 417 (5%) exceeded normal affordability levels in quarter one.
This means that buying a median priced home was less affordable in only 5% of the U.S. counties. In the second quarter the U.S. housing market has seen a pretty significant increase in that number, a total of 54 more counties (18%).
That being said, annual wage growth outpaced annual home price growth in the majority of U.S. Counties 228 out of 417 saw these results for a total of 55% of the counties in this study. Counties that contain cities such as Miami, San Antonio, Detroit, and San Jose all have seen home prices continue to out edge annual wage growth.
This is the first time the majority has switched since 2012. The past 16 quarters average home price has outpaced annual wage growth. On the other hand in 45% of U.S. counties studied annual home price has outpaced annual wage growth in counties that contain cities like Los Angeles, Phoenix, and Chicago. As homes in these counties are becoming less affordable for the first time in four years, annual wage growth has out edged annual home price growth.
Written by Front Street Intern Nicholas DeMassi.