SEATTLE, June 9, 2017 /PRNewswire/ -- Buying the
typical home listed for sale in more than half of the nation's 35
largest markets will require a greater share of income than the
median-valued home required historically, according to a new
Zillow® analysisi.
One reason this home shopping season is so difficult for buyers
is that the homes available for sale are generally more expensive
than the median home value of all homes in the same market.
As home prices recovered and surpassed the peak values reached
during the housing bubble, concerns about housing affordability
also returned, despite low mortgage rates keeping monthly payments
relatively affordable. The large down payments that come with high
prices are a significant barrier to homeownership, and the monthly
payments are taking up a larger share of income as well.
Nationally, mortgage payments on the median home for sale
require 20 percent of the median income.
"Homes have gotten so expensive in many major cities that even
with low mortgage rates, monthly costs for homes that are currently
for sale are starting to be unaffordable," said Zillow Chief
Economist Dr. Svenja Gudell. "Down
payments are a top concern for today's homebuyers, but the reality
is that monthly costs are becoming unaffordable as well. Low
inventory is pushing sticker prices higher, and when mortgage rates
start to rise, monthly payments will be driven further into
unaffordable territory."
Los Angeles homebuyers have to
spend the highest share of income on mortgage payments – the
typical home for sale would require 46.8 percent of the median
income. In the years leading up to the housing bubble, Los Angeles homebuyers would have had to spend
35.2 percent of their income on mortgage payments for the typical
home.
Cleveland homes for sale are
more affordable than homes were historically. The median list price
of about $144,000 would require 12.7
percent of the median income for monthly mortgage payments. In
pre-bubble years, paying the mortgage on the typical Cleveland home required 20 percent of the
median income.
Metropolitan
Area
|
% Income
Spent on
Mortgage - List
Price, Q1 2017
|
% Income
Spent on
Mortgage -
ZHVI, Q1 2017
|
% Income
Spent
on Mortgage -
ZHVI, 1985-2000
|
United
States
|
20.0%
|
15.9%
|
21.0%
|
New York/Northern New
Jersey
|
29.3%
|
26.9%
|
29.7%
|
Los Angeles-Long
Beach-Anaheim, CA
|
46.8%
|
43.3%
|
35.2%
|
Chicago,
IL
|
18.5%
|
14.9%
|
22.8%
|
Dallas-Fort Worth,
TX
|
22.9%
|
15.2%
|
20.4%
|
Philadelphia,
PA
|
15.1%
|
14.9%
|
20.0%
|
Houston,
TX
|
21.6%
|
13.1%
|
15.3%
|
Washington,
DC
|
20.2%
|
18.6%
|
22.3%
|
Miami-Fort
Lauderdale, FL
|
30.1%
|
22.2%
|
20.0%
|
Atlanta,
GA
|
17.8%
|
13.1%
|
19.1%
|
Boston, MA
|
26.7%
|
24.0%
|
26.2%
|
San Francisco,
CA
|
40.2%
|
42.6%
|
38.3%
|
Detroit,
MI
|
14.2%
|
11.6%
|
16.6%
|
Riverside,
CA
|
27.9%
|
25.9%
|
26.5%
|
Phoenix,
AZ
|
22.5%
|
18.8%
|
21.3%
|
Seattle,
WA
|
24.7%
|
25.5%
|
25.2%
|
Minneapolis-St Paul,
MN
|
18.4%
|
15.4%
|
18.4%
|
San Diego,
CA
|
39.6%
|
35.5%
|
34.1%
|
St. Louis,
MO
|
13.1%
|
11.9%
|
16.1%
|
Tampa, FL
|
21.5%
|
17.1%
|
18.7%
|
Baltimore,
MD
|
17.3%
|
16.4%
|
21.4%
|
Denver, CO
|
27.3%
|
23.2%
|
21.9%
|
Pittsburgh,
PA
|
12.9%
|
11.3%
|
15.5%
|
Portland,
OR
|
27.6%
|
25.2%
|
22.5%
|
Charlotte,
NC
|
22.6%
|
14.2%
|
18.3%
|
Sacramento,
CA
|
29.1%
|
25.7%
|
28.6%
|
San Antonio,
TX
|
22.5%
|
13.2%
|
17.7%
|
Orlando,
FL
|
23.2%
|
18.2%
|
20.4%
|
Cincinnati,
OH
|
14.6%
|
12.0%
|
19.3%
|
Cleveland,
OH
|
12.7%
|
11.6%
|
20.0%
|
Kansas City,
MO
|
16.1%
|
11.5%
|
20.1%
|
Las Vegas,
NV
|
22.8%
|
19.2%
|
25.9%
|
Columbus,
OH
|
16.3%
|
12.5%
|
20.0%
|
Indianapolis,
IN
|
14.5%
|
11.4%
|
20.8%
|
San Jose,
CA
|
39.3%
|
43.3%
|
36.0%
|
Austin, TX
|
22.9%
|
18.3%
|
18.9%
|
Zillow
Zillow® is the leading real estate and rental
marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Launched in 2006, Zillow is owned and operated by Zillow
Group (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
______________________________
i For mortgage affordability, Zillow assumed a 20
percent down payment and a 30-year, fixed-rate mortgage at
prevailing mortgage rates pulled from the Primary Mortgage Market
Survey® provided by Freddie Mac. We considered the median value of
all homes in a given market – even those not listed for sale – and
the median price of those actually listed for sale.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mortgage-payments-are-unaffordable-in-half-of-americas-largest-markets-300471524.html
SOURCE Zillow