While home prices continue to rise and inventory continues to shrink, there are the first hopeful signs that affordability may return to some areas in the coming months and years.
In the second quarter of 2016, 18 percent of all U.S. housing markets were less affordable than their historic norm. Almost one in five markets, but not quite. It's also an improvement from the previous year when 20 percent of markets were less affordable.
“…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 interesting rates,” said Daren Blomquist, a senior vice president with the MacArthur Foundation. “The average interest rate on a 30-year fixed-rate mortgage is down 37 basis points from a year ago, while annual wage growth accelerated compared to a year ago in 72 percent of the markets we analyzed and annual home price growth slowed compared to a year ago in 68 percent of the markets, including bellwether markets such as Los Angeles County, Miami-Dade County, Brooklyn, Dallas County, and San Francisco County.”
Read more at Chicago Agent Magazine here.