Welcome!

News Feed Item

34 Percent of U.S County Housing Markets Now Less Affordable for Buying Than Their Long-Term Averages According to RealtyTrac Q2 2014 Affordability Report

Rising Interest Rates Could Push up to 53 Percent of Markets Above Historic Norms; Report Also Identifies Markets That Are "Inherently Unaffordable," "Consistently Affordable" and "Affordable With Jobs"

IRVINE, CA -- (Marketwired) -- 08/07/14 -- RealtyTrac® (www.realtytrac.com), the leading online marketplace for real estate data, today released a report analyzing affordability for buying a residential property in more than 1,000 counties nationwide, which shows that as of 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 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.

"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, 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," said Daren Blomquist, vice president at RealtyTrac. "But the scales are beginning to tip away from the extremely favorable affordability climate we've seen over the last two years, with one-third of the counties analyzed -- representing 19 percent of the total population in those counties -- now less affordable than their long-term averages.

"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," Blomquist continued. "Buyers looking for markets with a combination of affordable housing and a good job climate will find those mostly 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."

Second quarter affordability highlights
Of the 1,194 counties with data in the second quarter (combined population of 258 million), the average percentage of median income needed to buy a median priced home was 19.07 percent.

Of the 1,194 counties with data, 793 counties with a combined population of 210 million (81 percent of total population) had an income-to-price affordability percentage that was below the historical average for that county -- meaning the county was more affordable for buyers than it has been on average over the past 14 years.

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.

Meanwhile, 401 counties with a combined population of 49 million (19 percent of total population) had an income-to-price affordability percentage above the historical averages for that county -- meaning the county was less affordable for buyers than it has been on average over the past 14 years.

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).

Inherently unaffordable markets
Of the 2,268 counties with historical affordability data (combined population 305 million), the historical average percentage of median income needed to buy a median priced home was 18.77 percent.

Of those 2,268 total counties, there were 23 counties with a combined population of 21 million (7 percent of total population) with an average historical income-to-price affordability percentage of 50 percent or higher.

Counties in this inherently unaffordable category included vacation home markets like Nantucket County, Mass. (111 percent), Teton County, Wyoming (84 percent), and Pitkin County, Colo. (82 percent) along with four out of the five boroughs in New York City, and San Francisco County (85 percent), and Los Angeles County (50 percent) in California.

Consistently affordable markets
On the other end of the spectrum, there were 831 counties with a combined population of 44 million (14 percent of the total population of the 2,268 counties with historical affordability data) with an average historical income-to-price affordability percentage of 15 percent or less.

Counties in this consistently affordable category included Wayne County, Mich., in the Detroit metro area (13 percent of median income needed to buy a median priced home on average since January 2000), Marion County, Ind., in the Indianapolis metro area (14 percent), Monroe County, N.Y., in the Rochester metro area (12 percent), Baltimore City, Md., (14 percent), and Montgomery County, Ohio, in the Dayton metro area (14 percent).

Affordable with jobs markets
The report also looked at markets with the favorable combination of low income-to-price affordability percentages and low unemployment rates. Among counties with a population of 100,000 or more, there were 66 counties with a combined population of 16 million where the average historical income-to-price affordability percentage was 20 percent or below, where the May 2014 unemployment rate was 5 percent or lower and where the May 2014 income-to-price affordability percentage was below the historical average.

Counties in this affordable-with-jobs markets category included Franklin County, Ohio (Columbus), Oklahoma County, Okla., (Oklahoma City), Tulsa County, Okla., (Tulsa), Summit County, Ohio (Akron), Douglas County, Neb., (Omaha), Greenville County, S.C. (Greenville), and Polk County, Ia., (Des Moines).

Impact of rising interest rates on affordability
The report analyzed the income-to-price affordability percentages in each of the 1,194 counties with data available in the second quarter if median prices remained the same as they were in the second quarter but interest rates rose by a quarter percentage point, a half a percentage point, three-quarters a percentage point or a full percentage point.

If interest rates rise a quarter percentage point, 461 counties with a combined population of 77 million (30 percent of total population) will exceed their historical average for income-to-price affordability percentage, and 27 counties with a combined population of 2.8 million (1.1 percent of total population) will exceed their historical peaks for income-to-price affordability percentage.

If interest rates rise a half a percentage point, 515 counties with a combined population of 87 million (34 percent of total population) will exceed their historical average for income-to-price affordability percentage, and 39 counties representing a combined population of 3.6 million (1.4 percent of total population) will exceed their historical peaks for income-to-price affordability percentage.

If interest rates rise three-quarters of a percentage point, 576 counties with a combined population of 101 million (39 percent of total population) will exceed their historical average for income-to-price affordability percentage, and 46 counties with a combined population of 4.2 million (1.6 percent of total population) will exceed their historical peaks for income-to-price affordability percentage.

If interest rates rise one full percentage point, 630 counties with a combined population of 120 million (46 percent of total population) will exceed their historical averages for income-to-price affordability percentages, and 59 counties with a combined population of 4.7 million (1.8 percent of total population) will exceed their historical peaks for income-to-price affordability percentage.

Report methodology
Affordability rates for this analysis are the percentage of median household income needed to make monthly house payments on a median-priced residential property in each given county in each given month from January 2000 to May 2014. In most states, the median price was derived from sales deeds recorded at the county level. In some states known as non-disclosure states (AK, ID, IN, KS, LA, ME, MS, MO, MT, NM, ND, TX, UT, WY) where the median price is not consistently available from the sales deed, median list prices were used to calculate the affordability rates. Annual median household income data came from the U.S. Census Bureau for 2000 to 2012. Annual median household income for 2013 to 2014 was estimated based upon 2000 to 2012 numbers and then adjusted for current market conditions. In calculating average house payments, fixed 30 year mortgage rates were obtained from Freddie Mac for every month. It was assumed that the average borrower would make a 20 percent down payment, the mortgage term would be 30 years, and insurance combined with property tax would be 1.39 percent of the value of the home.

Report License
The RealtyTrac U.S. Foreclosure Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Data Licensing and Custom Report Order
Investors, businesses and government institutions can contact RealtyTrac to license bulk foreclosure and neighborhood data or purchase customized reports. For more information contact our Data Licensing Department at 800.462.5193 or [email protected].

About RealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is the leading supplier of U.S. real estate data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 129 million property parcels nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 30 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts®. RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.

Embedded Video Available

Embedded Video Available: http://www2.marketwire.com/mw/frame_mw?attachid=2653085

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settl...
In his session at @ThingsExpo, Dr. Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, presented the findings of a series of six detailed case studies of how large corporations are implementing IoT. The session explored how IoT has improved their economic performance, had major impacts on business models and resulted in impressive ROIs. The companies covered span manufacturing and services firms. He also explored servicification, how manufacturing firms shift from se...
"I will be talking about ChatOps and ChatOps as a way to solve some problems in the DevOps space," explained Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
For better or worse, DevOps has gone mainstream. All doubt was removed when IBM and HP threw up their respective DevOps microsites. Where are we on the hype cycle? It's hard to say for sure but there's a feeling we're heading for the "Peak of Inflated Expectations." What does this mean for the enterprise? Should they avoid DevOps? Definitely not. Should they be cautious though? Absolutely. The truth is that DevOps and the enterprise are at best strange bedfellows. The movement has its roots in t...
Learn how to solve the problem of keeping files in sync between multiple Docker containers. In his session at 16th Cloud Expo, Aaron Brongersma, Senior Infrastructure Engineer at Modulus, discussed using rsync, GlusterFS, EBS and Bit Torrent Sync. He broke down the tools that are needed to help create a seamless user experience. In the end, can we have an environment where we can easily move Docker containers, servers, and volumes without impacting our applications? He shared his results so yo...
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, compared the Jevons Paradox to modern-day enterprise IT, examin...
Kubernetes is a new and revolutionary open-sourced system for managing containers across multiple hosts in a cluster. Ansible is a simple IT automation tool for just about any requirement for reproducible environments. In his session at @DevOpsSummit at 18th Cloud Expo, Patrick Galbraith, a principal engineer at HPE, discussed how to build a fully functional Kubernetes cluster on a number of virtual machines or bare-metal hosts. Also included will be a brief demonstration of running a Galera MyS...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
Digital transformation has increased the pace of business creating a productivity divide between the technology haves and have nots. Managing financial information on spreadsheets and piecing together insight from numerous disconnected systems is no longer an option. Rapid market changes and aggressive competition are motivating business leaders to reevaluate legacy technology investments in search of modern technologies to achieve greater agility, reduced costs and organizational efficiencies. ...
Amazon started as an online bookseller 20 years ago. Since then, it has evolved into a technology juggernaut that has disrupted multiple markets and industries and touches many aspects of our lives. It is a relentless technology and business model innovator driving disruption throughout numerous ecosystems. Amazon’s AWS revenues alone are approaching $16B a year making it one of the largest IT companies in the world. With dominant offerings in Cloud, IoT, eCommerce, Big Data, AI, Digital Assista...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...