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Bigger Pinch: Housing Affordability

Research & Analysis | May 21, 2014

Housing Affordability

So where's the most affordable place to buy a home for the typical family?  You might be surprised.  The NYC metro is actually more affordable than Boulder, San Jose and Barnstable Town, MA. The most affordable metro area in the country is now Decatur, IL.

We started updating our interactive affordability map every quarter about a year ago to see how affordability affects the typical homebuyer in his or her market for those looking to purchase a median-priced home. So what has changed since last quarter?

With the latest data, 36 out of the 163 metros are now unaffordable. While that's only 22% of markets, these markets represent roughly 40% of households in our sample. Of the three affordability components since last quarter, overall house prices rose 1.2 percent, incomes rose 0.6 percent, and mortgage rates were essentially flat rising on average from 4.30% to 4.36% for a 30-year fixed-rate mortgage based on our survey.

Since our last update:

Six metros were added: Canton and Youngstown OH and Decatur, IL, Eugene, OR, Richmond, VA and Salt Lake City, UT. The first three are considered affordable and the latter three are not.
Six metros became affordable: Albuquerque, NM, Colorado Springs, CO, El Paso, TX, Salem, OR, Tallahassee, FL, Yakima, WA
Five metros became unaffordable: Austin, TX, Bismarck, ND, Cape Coral, FL, Las Vegas, NV, Tucson, AZ

Affordability can also vary by how much the typical borrower has to put toward a down payment as well as local taxes and insurance among other things. All these factors can be adjusted in our interactive map.


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