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Home affordability worsens — but not everywhere, report finds

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Homebuyers have been in a pinch of rising prices for over a year, but now rising mortgage rates are further reducing affordability. First quarter “Affordable Report on US Homes in 2022According to real estate data analysis firm Attom, some of the wages required to buy a home have increased at the fastest pace in more than 15 years from the first quarter of 2021 to the first quarter of 2022. rice field.

Median housing was not more affordable than historical averages in 79% of counties across the country in the first quarter of 2022, according to the report. This represents the highest point since mid-2008, compared to 38% of counties that were historically unaffordable in the first quarter of 2021.

Affordability is determined by Attom researchers as a comparison of the average income required to pay for home ownership (including mortgage payments, taxes and insurance) for homes at average prices in each county. The analysis assumes that the down payment is 20% and the cost of owning a house is up to 28% of household income.

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Until recently, low mortgage rates and rising wages could offset rising house prices, but mortgage rates are approaching. 5 percent Affordable prices fell in the first quarter of this year. Median national home prices rose 16% from the first quarter of 2021 to the first quarter of 2022 to a record $ 320,000. At the same time, average wages rose by only 7 percent.

In the short term, housing affordability has deteriorated, and housing shortages continue to be a problem, especially for entry-level homes, but a recent report from real estate settlement and risk solution provider First American Financial Corporation reports. , Housing was, in fact, more affordable today than at the peak of the housing market in 2006.

The First American Real Estate Price Index (RHPI) measures price changes in US single-family homes, adjusted for the effects of changes in income and interest rates to determine home buying power.

In January, First American analysts found that adjusted home prices were 29% below their April 2006 peak, coupled with rising wages and falling mortgage rates. According to Mark Fleming, Chief Economist at First American, household income today is nearly 48% higher than in April 2006. The average mortgage rate is also more than 3 percent lower than in April 2006.

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According to First American’s analysis, homes across the country are on average 34% more affordable than in April 2006.

DC and Baltimore have been the most affordable cities since April 2006, both 53% affordable. The top three cities with improved affordability since their peak are Chicago (52%), Miami (50%), and Riverside, California (48%).

Affordability has improved the most since the peak of the housing market in Nashville (0.3% from peak), Buffalo (3%), Denver (9%), Kansas City, MO (12%) and Salt Lake City (15%). Not.

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