Homes in an increasing number of communities grew less affordable during the second quarter of the year, RealtyTrac said Thursday.
In a release for its Housing Affordability Index for the second quarter, the company said 18% of U.S. housing markets were less affordable in Q2 2016 compared to their historic norms. That's a jump from 5% of markets reported in the previous quarter, but down from the 20% reported a year ago.
Of the 417 counties analyzed, 74 counties had an affordability index below 100 in the second quarter. That means buying a median-priced home was less affordable than the historically normal level for each county dating back to the first quarter of 2005.
“Although nearly one in five U.S. housing markets was not affordable by historic standards in the second quarter, the good news is that affordability is improving compared to a year ago in the majority of markets thanks to a combination of slowing home price appreciation and accelerating wage growth, along with falling interest rates,” RealtyTrac Senior Vice President Daren Blomquist said.
Annual wage growth outpaced home price growth in 55% of the counties, including Miami-Dade County, Fla.; Kings County, N.Y.; Santa Clara County, Calif.; Wayne County, Mich.; and Bexar County, Texas.
Before the second quarter of the year, annual home price growth outpaced annual wage growth in more than half the counties analyzed for 16 consecutive quarters.
Home price growth outpaced wage growth in 45% of the counties, including Los Angeles County, Calif.; Cook County, Ill.; Harris County, Texas; Maricopa County, Ariz.; and San Diego County, Calif.
Kings County, N.Y. was the least affordable by the absolute standard of percentage of wages needed to buy a median priced home, followed by Marin County, Calif.; Santa Cruz County, Calif.; and San Francisco County, Calif.
Counties where homes were most affordable were Clayton County, Ga.; Wayne County, Mich.; Baltimore, Md.; and Bay County, Mich.
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