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Homes less affordable in 1 out of 3 U.S. counties


IRVINE, Calif. – Aug. 7, 2014 – RealtyTrac today released a report analyzing affordability for buying a residential property in counties nationwide.

In the second quarter of 2014, one-third of the counties analyzed have surpassed their historical averages for income-to-price affordability percentages since 2000, making them less affordable now than they have been, on average, over the last 14 years.

"The good news is that none of the nearly 1,200 counties we analyzed for the second quarter has regressed to the dangerously low affordability levels reached during the housing price bubble," says Daren Blomquist, vice president at RealtyTrac. "And even if interest rates increased 1 percentage point, only 59 counties representing 2 percent of the U.S. population would be at or above bubble levels in terms of affordability."

Blomquist says affordability, however, is "beginning to tip away from the extremely favorable affordability climate we've seen over the last two years. Still, 81 percent of the U.S. population lives in markets where the percentage of income needed to purchase a median-priced home is at or below its long-term average."

According to Blomquist, most of the affordable markets based on income and housing prices are "in the middle of the country, in places such as Columbus, Ohio, Oklahoma City, Omaha, Des Moines and Minneapolis, all of which have counties where 20 percent or less of the median income is needed to buy a median-priced home and where unemployment rates are 5 percent or lower."

The report calculated both the percentage of median income needed to make monthly payments on a median-priced home in each county in May 2014, as well as the historical trend in each county's income-to-price affordability percentage going back to January 2000. It also analyzed the impact of rising interest rates on affordability, calculating the percentage of median income needed to make payments on a median-priced home if interest rates rise by a quarter percentage point, a half percentage point, three-quarters of a percentage point or a full percentage point.

Counties still more affordable than their long-term averages in the second quarter included Los Angeles County (by less than a half a percentage point), Cook County, Ill. (Chicago), Maricopa County, Ariz. (Phoenix metro), San Diego and Orange counties in Southern California, Miami-Dade County in South Florida, and the New York City boroughs of Kings County (Brooklyn) and Queens County.

Counties less affordable than their long-term averages included San Francisco County, Calif., Multnomah County, Ore. (Portland), Travis County, Texas (Austin), Bexar County, Texas (San Antonio), Harris County, Texas (Houston) and Fulton County, Ga. (Atlanta).

© 2014 Florida Realtors®


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