(Central Square) – Demand for homes in some parts of the country has led to declining supply, a sharp rise in prices and buyers who need almost 50% more income than they would have last year to even enter the leading markets. report real estate brokerage firm Redfin.
“Housing is much less affordable than a year ago because rising housing costs have outpaced wage growth, which means many Americans are now deprived of home ownership,” said Redfin Deputy Chief Economist Taylor Marr.
As more people work remotely and can live anywhere to work, many flock to the Sunny Belt cities, with the most popular destinations being Tampa, Phoenix and Las Vegas. They are also the most expensive: to buy potential homeowners need more than 40% more income than last year.
Buyers flock to Sun Belt “in part because they are relatively affordable compared to expensive coastal employment centers, but as a result, rising house prices may make them less popular in the future,” the analysis showed.
Tampa has quickly become the least accessible market: homebuyers need 47.8% more income than a year ago, more than in any other metro area in the U.S., the report said.
Home buyers in Tampa will need to earn $ 67,353 a year to afford a monthly mortgage payment of $ 1,684. Last year, they needed to earn $ 45,562. Most workers do not increase their salary by $ 21,791 in one year, let alone ten years. This means that many who could afford to buy last year were appreciated. But those who can, buy at an average sale price of $ 363,750.
Phoenix home buyers need to earn $ 87,026, up 45.7% from the previous year, to afford a monthly mortgage payment of $ 2,176 in the area. The average sale price is $ 470,000.
Buyers in Las Vegas have to earn $ 79,620, up 45.6% from a year ago, to afford a monthly payment of $ 1,990. The average sale price is $ 430,000.
Homeowners need nearly 40% or more of their income to buy in Orlando and Jacksonville, Florida, Austin, Fort Worth and Dallas, Texas, Anaheim and San Diego, California, as well as the Nashville, Atlanta and Charlotte, North Carolina.
Redfin analyzed average house sales prices between March 2021 and March 2022. It focuses on affordability based on the fact that buyers take out loans rather than pay in cash. It determines the monthly mortgage payment, which is no more than 30% of the income of the home buyer.
Across the country, Americans are migrating, despite or because of high costs. A seller who leaves New York with an average home sale price of $ 677,654, for example, is more likely to afford to buy a home in Las Vegas or Tampa, even if homes there are overpriced because they are much less expensive than in New York. -York. Similarly, the cost of living is lower, and Nevada and Florida do not levy state income tax.
A record 32.3% of Redfin.com users across the country were looking to move to another metro area in the first quarter of this year, a separate Redfin analysis found. This is more than 31.5% a year earlier and 26% more than in 2019.
“Rising house prices and rising mortgage rates have made moving to a more affordable area the only possible option for some potential home buyers,” the report said.
Across the country, homebuyers need to earn $ 76,414 annually to afford a monthly mortgage payment of $ 1,910, up 34.2% from the previous year. The average national home sales is $ 412,687, up 17.3% from last year.
While house prices are rising rapidly, wages are rising, but not at the same rate. The average hourly wage in the United States grew up by 5.6% last year, according to the Bureau of Labor Statistics. Over the past decade, average house prices have risen by about 30%, while household incomes have risen by 11% over the same period. analysis found.
From 2019 to 2021, “the average ratio of housing prices and incomes increased from 4.7 to 5.4 – by 14.9% and more than twice the recommended ratio of 2.6. In other words, houses cost 5.4 times more than the average person earns in a year, ” analysis from Clever Real Estate found. It also notes that since 1965, after inflation, housing prices have risen by 118%, and household incomes have risen by only 15%.
As housing prices outpace wages, stocks continue to decline. An analysis National Association of Realtors and Realtor.com notes that a household earning between $ 75,000 and $ 100,000 can afford to buy 51% of active housing inventory compared to being able to buy 58% of homes for sale in 2019.
One possible exchange rate adjustment could be an increase in interest rates by the Federal Reserve and thus mortgage rates. Mar notes: “The good news is that rising mortgage rates also have a positive side: they are likely to slow down prices and curb competition for homes, providing a reprieve for some potential buyers.”