August 14, 2014

Nearly 30% of Housing Metros Unaffordable

30 Percent Housing Metros Unaffordable

Since our last update, eleven more metros became unaffordable: Albuquerque, NM, Colorado Springs, CO, Durham, NC, Kingston, NY, Milwaukee, WI, Panama City, FL, Salem, OR, Spokane, WA, Springfield, MA, Tallahassee, FL, Virginia Beach, VA

We started updating the below interactive affordability map every quarter about a year ago to see how affordability (house prices, income and mortgage rates) affects the typical homebuyer in his or her market for those considering looking to purchase a median-priced home. With the latest data, 47 of the 163 metros are now unaffordable. While that's only 29% of markets, these markets represent roughly 44% of households in our sample.

Of the three affordability components, house prices rose 3.6% quarter over quarter, personal incomes rose 1%, and mortgage rates were down from the previous quarter declining on average from 4.36% to 4.23% for a 30-year fixed-rate mortgage based on our survey.

But this can vary widely based on where you live, (or may be looking to live) primarily because of house price gains. This is one reason we created MiMi to help put local markets in perspective and it's also why it's important to work with your local housing professionals if you're looking to buy or sell. Local affordability is reflected in MiMi's Payment-to-Income indicator, one of the four indicators we look at for each of the largest 50 metro markets when measuring overall stability.  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 to see how that may be affecting housing affordability in your market today and moving forward.

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