Wake up among the least affordable home markets; Those earning an average salary can’t afford a median house
RALEIGH- Homes in Wake County are among the least affordable in the country, according to a new analysis of real estate market data and salary data conducted by ATTOM Data Solutions. Meanwhile, in County Durham, the situation isn’t as bad, but homes are also getting harder to buy there.
First, let’s look at Wake County.
The study, which tracks housing affordability as it relates to wages and incomes in 586 counties across the United States, finds that an average earner currently cannot afford to buy a home in Wake County. at the median price.
The data shows a median price in Wake County of $410,000.
ATTOM’s calculations of housing affordability would require a median annual salary of at least $76,378. But ATTOM found annualized weekly wages in the county equaled an annual income of $67,522.
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Second largest drop in the United States
Of all the counties in the United States with a population of one million or more, Wake County’s housing affordability has declined the second most, according to ATTOM data.
The data shows a 25.7% drop from the first quarter of 2021 to the first quarter of 2022.
St. Louis County, Missouri, is the county with the largest decline in accessibility during this period, among the 49 counties with more than one million residents.
“It’s certainly no surprise that affordability is tougher today for potential buyers than it was a year ago,” said Rick Sharga, executive vice president of intelligence at contract for ATTOM, in response to a request from WRAL TechWire. “Historically low mortgage rates and higher wages have helped offset rising house prices over the past few years, but as house prices continue to soar and interest rates approach 5% on a 30-year fixed rate loan, more and more consumers will struggle to find a property they can comfortably afford.
A March 2022 market update from the Triangle Multiple Listing Service also revealed that homes in the Triangle have never been less affordable.
Triangle homes have never been so affordable
The picture of County Durham
It’s not just Wake County where housing affordability has plummeted – homes in County Durham are also less affordable than they were a year ago, as ATTOM data shows.
Of the 586 U.S. counties with a population of at least 200,000, Durham County ranks 46th in terms of deteriorating accessibility. In the first quarter of 2022, housing affordability decreased by 24.4%, according to the study.
But the median first-quarter home price in County Durham was $342,000, according to ATTOM Data Solutions. And the annualized weekly salary used to measure annual income gave a higher figure than in Wake County – the report measured it at $81,900 when an annual salary of $64,839 would make the median-priced home a affordable home in the county.
The report determined affordability for average earners by calculating the amount of income needed to meet major monthly homeownership expenses — including mortgage, property taxes and insurance — on a single-family home. at median price. The calculations assumed a down payment of 20% and a maximum “initial” debt-to-income ratio of 28%. This required income was then compared to annualized average weekly wage data from the US Department of Labor’s Bureau of Labor Statistics.
Affordability could also deteriorate as mortgage interest rates rose again this week. The most recent data from Freddie Mac shows average rates for a 30-year fixed mortgage of 4.72%, up 1.59 points from a year ago.
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Keeping tenants out?
Housing affordability continues to be a concern for potential first-time home buyers, according to new research from Redfin.
According to the national survey of 1,500 renters, 32% said they couldn’t afford to buy a home in a place they wanted to live, and 3 in 10 respondents said they couldn’t. save for a down payment.
In that same survey, the most common barrier to saving for a home purchase was debt, although the study did not further break down the type of debt that presents financial barriers to renters when they consider their life options. The option available to respondents listed debt as a broad category and provided “credit cards, student loans, medical bills, auto, etc.” in the form of a descriptive note. According to Redfin, 45% of respondents cited debt as a barrier.
But 44% of respondents also said the price of homes in their area was a financial barrier that kept them from pursuing a home purchase.
Additionally, among respondents who said they would be moving in the next three months, 11% of respondents said the reason they would be moving is because the landlord was selling the house they were renting in.
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