Warning: Undefined variable $custom_content in /home4/comcompare/public_html/mortgagenews/wp-content/plugins/code-snippets/php/snippet-ops.php(582) : eval()'d code on line 10
A new analysis shows that homeownership is now out of reach for most people in more than 4 counties out of 10 across the U.S.
Attom Data Solutions, a provider of property data tracked that the home prices jumped more than 10% in two-thirds of the 569 counties which represent about 250 million Americans.
Attom said, compared to a year earlier in 20% of counties it is found that homeownership is now unaffordable, it was 205 in 2020 now has risen to 242 counties in the second quarter.
Todd Teta, chief product officer with Attom said that the latest data signal that America’s housing market is going in the wrong direction.
The surge in home prices is raising concerns with some market observers saying that it is going the same path that led to the 2006 housing bubble.
What is considered "affordable"?
When the home prices are rising it means ownership costs are higher across the nation.
The typical home now requires the average national wage of $64,000 which is 25.2%, up from 22.2% of the average wage the previous year.
Homeownership is considered affordable if including costs for mortgage payments, home insurance, and property taxes the homeowners pay less than 28% of the typical local annual income on their properties.
The study found that as property prices rise, homebuyers need to pay above that threshold in about 43% of the country’s counties.
Lack of inventory
The scarcity of homes on the market is one of the main drivers of higher prices, causing buyers to bid up homes, some are offering all-cash offers and some even forego traditional sale contingencies like home inspections.
With shrinking inventory leading to bidding wars and more reluctance on the part of some homeowners to list their homes for sale it is creating a vicious cycle.
Reference Source: CBS News
