Top 5 U.S. Cities Experiencing Drops in Affordable Homes

first_img Data Provider Black Knight to Acquire Top of Mind 2 days ago  Print This Post Home / Daily Dose / Top 5 U.S. Cities Experiencing Drops in Affordable Homes The Week Ahead: Nearing the Forbearance Exit 2 days ago November 25, 2020 1,069 Views Veronica Bradley has covered the consumer packaged goods industry, the tech industry, the healthcare industry, and a few other industries that impact people’s daily lives. When she isn’t researching and writing, she moonlights as an amateur accountant and bookkeeper for a small family brewpub, because unlike most writers, she isn’t afraid of numbers. Sign up for DS News Daily Demand Propels Home Prices Upward 2 days ago in Daily Dose, Featured, News Many factors determine the affordability of housing on both a local and national level. Looking at the big picture, increased average income and decreased mortgage rates should equal more affordable housing across the country. However, this isn’t the case according to First American Economic Center (FAEC).Individual consumers have more house-buying power when 30-year mortgage rates are down and their income is up, but the problem is inventory. Higher demand for homes in a supply-constrained market stokes the fire for rapid appreciation.In fact, September 2020 showed the quickest appreciation since 2013, and home affordability actually declined in 41 of 50 markets tracked by FAEC. The five cities with the highest month-over-month decline in affordability are:Kansas City, MO with -2.3%Las Vegas, NV with -1.9%Philadelphia, PA with -1.7%Pittsburgh, PA with -1.6%and Portland, OR with -1.6%Breaking these numbers down, it’s important to note that Kansas City also saw a 1.7% decline in monthly household income, by far the largest of the top five cities. Las Vegas and Philadelphia actually had faster house price appreciation, but household income didn’t decrease as much month-to-month.And Pittsburgh and Portland both saw affordability decrease at the same rate, but for different reasons. Pittsburg buyers had the highest house-buying power due to low mortgage rates and relatively steady income, however, appreciation was the highest of the five cities causing affordability to drop. In Portland, falling household income dropped enough to take affordability down with it.This is a lesson in statistics. Even though the national data shows affordability is increasing, individual market data paints a different picture. So, what does that mean for 2021?Looking at the year-over-year numbers instead of the monthly numbers, affordability decreased in only 13 of the top 50 markets, as opposed to 41. And, as of right now, houses are 5% more affordable than they were a year ago. But demand in historically supply-constrained markets is on the rise, meaning appreciation will follow suit. Expect another drop in affordability even with lower mortgage rates, especially if the average household income doesn’t trend upwards.The next few months will be interesting to watch. About Author: Veronica Bradley Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Subscribe Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Share Save The Best Markets For Residential Property Investors 2 days ago Previous: Remote Work Boosts Black Renters’ Ability to Buy Homes Next: Freddie Mac: Single-Family Delinquencies Down Servicers Navigate the Post-Pandemic World 2 days ago Related Articles Top 5 U.S. Cities Experiencing Drops in Affordable Homes Governmental Measures Target Expanded Access to Affordable Housing 2 days ago 2020-11-25 Cristin Espinosalast_img

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