New HSH.com Report Finds U.S. Housing Affordability Rising in Some Major Metro Areas
21 August 2019 - 12:30AM
HSH.com, a trusted online resource for mortgage data, content and
expertise, released today its latest analysis of the salary
required to afford a median-priced home.Covering the top 50
metropolitan areas, the report uses the latest quarterly home price
data from the National Association of Realtors (NAR), incorporates
local property tax and homeowner’s insurance costs, and calculates
the income needed to qualify for a median-priced home in each
market.For the second quarter of 2019, the latest research reveals
that affordability in most metro areas improved compared to the
second quarter of 2018, as a combination of lower mortgage rates
and smaller overall price increases helps lower the salary needed
to purchase a median-priced home.Compared to the same period last
year, and thanks largely to significantly lower mortgage rates, the
income required to purchase a median-priced home decreased in 32 of
the 50 major metropolitan areas HSH reviewed.
The most and least
affordable metro areas in the salary analysis (assuming a 20% down
payment):
Most affordable metropolitan area |
Required salary per year to afford a median-priced home |
- Pittsburgh
|
$35,523.62 |
- Oklahoma City
|
$37,073.13 |
- Cleveland
|
$41,257.51 |
Least affordable metropolitan areas |
Required salary per year to afford a median-priced home |
- San Jose
|
$249,884.51 |
- San Francisco
|
$201,430.63 |
- San Diego
|
$127,292.88 |
Salary calculations using a 10% down payment and
including PMI are also provided for each area.
Main takeaways:
- Home price gains continue to cool. Across the 50 most
populous metro areas, the median annual price increase in the
second quarter of 2019 was 3.93%; for the same period in 2018, that
increase was 6.60% and in 2017, 7.04%. Three metro areas saw
actual year-over-year decreases in the median price: San Jose, CA;
San Francisco, CA and Oklahoma City, OK.
- Lower mortgage rates have been the key for improving
affordability. During the second quarter last year,
mortgage rates were on the rise. Including stated fees, a
conforming, 30-year fixed-rate mortgage averaged 4.66% for the
period. This year, that average was 4.14%.
- Declines in the annual income needed to purchase a
median-priced home varied greatly, ranging from just $154.21 in
the Nashville, TN metro area to as much as $24,738.68 in the San
Jose, CA metropolitan area. In markets where the required
salary increased compared to last year, those amounts ranged from
$5.69 in the St Louis, MO metro to $2,594.30 in the Austin, TX
metro area.
- Smaller home price increases in many places may allow
still-rising incomes a chance to close the affordability gap a
bit. For July, the Bureau of Labor Statistics noted that
wages are rising at a 3.2% annual clip. Given this, there are only
two markets in 2Q19 (Columbus, OH and Austin, TX) where the
year-over-year increase in salary needed to purchase a
median-priced home outstripped the reported year-over-year increase
in wages. As such, and while still a problem, it looks as though
affordability is improving, at least based on this reference
point.
Potential homebuyers of modest means often struggle to come up
with a down payment and closing costs, especially in heated
markets. Help making the jump to homeownership is often available
but is tricky to find if you don't know where to look. To support
prospective homebuyers, HSH offers its database of Homebuyer
Assistance Programs by state, where information about these
valuable programs, vital website addresses, contact info and more
is accessible.
Find the complete list of the 25 most expensive and 25 least
expensive metropolitan areas with display maps for each
segment.
About HSH.com
HSH.com is owned and operated by QuinStreet, Inc.
(Nasdaq: QNST), a pioneer in delivering online marketplace
solutions to match searchers with brands in digital media.
QuinStreet is committed to providing consumers and businesses with
the information and tools they need to research, find and select
the products and brands that meet their needs. HSH.com is a member
of the company’s expert research and publishing division.
Since 1979, HSH.com has been a trusted mortgage resource for
consumers seeking independent, objective and expert-level
information, forecasts and data. HSH.com offers unique analysis,
calculators, tools and content to help demystify first mortgages,
home equity loans and lines of credit, reverse mortgages and more.
HSH.com empowers homebuyers and homeowners to fully understand
their home financing choices and provide opportunities for them to
engage with partners to execute their transactions.
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Rick Judge
Liberty Communications for QuinStreet
415-429-5652
QuinStreet@libertycomms.com
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