Home Affordability Reaches All Time Low
January 11, 2019
As we kick off 2019 there has been a lot speculation of what this year has in store for the real estate market. During the last quarter of 2018 there was much talk of a shift in the market with price increases slowing, more properties available on the market and fewer buyers retreating to the sidelines. However, this doesn’t mean that buyers have been having an easier time just yet.
According to a recent report from ATTOM Data Solutions, home affordability has reached its lowest level in a decade during Q4 of last year. The data firm had identified affordability of homes in 469 counties and reviewed the percentage of income that would be needed to buy a median priced home.
"Home affordability is getting worse nationwide," says Daren Blomquist, senior vice president at ATTOM. But buyers shouldn't lose hope. "We're going to hit an affordability tipping point in 2019, where it becomes more affordable to buy. Buyers will have more inventory to choose from and they will be running against fewer multiple-offer situations."
Areas Affordability is Getting Harder
Buying a home during the 4th quarter of 2018 became more difficult in 42% of the counties that were examined in this report as compared to that of Q3. These regions included some coastal communities in California as well as the Phoenix and Las Vegas areas.
"The coastal California markets are still highly unaffordable ... because there is still a limited supply of homes and a lot of demand," Blomquist says. So they're less likely to be affected by a broader housing slowdown. "Those types of markets are going to operate a little bit outside of reality."
Areas Affordability is Getting Easier
Although it was becoming increasingly more challenging to buy a home in many areas, there were some locations that showed conditions becoming more favorable. These counties include areas around Chicago, IL, Houston, TX, San Diego and Los Angeles CA and Miami FL.
"The rate of home price appreciation is slowing down in these markets. It's slowed down enough where it's actually on par with wage growth," says Blomquist. "It means for buyers there's hope to get into homeownership."
Contact me today to discuss the real estate market specifics in your area.