Just in time for Halloween, check out the trouble that may be brewing in these pricey housing markets.
Housing affordability is reaching historic lows, and coupled with higher mortgage rates, that could mean trouble for future real estate prices. When housing becomes too expensive for most buyers, experts worry that demand will slack off, causing prices to weaken.
Affordability is dropping in key U.S. markets. That means people in these areas don’t earn enough to afford a home and housing is becoming less affordable by the day.
“Close to one-third of the U.S. population now lives in counties where buying a median-priced home requires at least $100,000 in annual income,” reported Daren Blomquist, senior vice president at Attom Data Solutions, in an article for National Mortgage News.
For example, in the #2 ranked Denver area, it takes $117,148 in income to afford a home. But local average income is only $68,419, putting homes out of reach for most people. It used to take about one-third of the average income to buy a home. Now it costs almost half of household income.
Here are the five most un-affordable housing markets in the U.S., according to data from Attom Data Solutions:
- San Francisco (Contra Costa, San Mateo, and Alameda Counties)
- Denver (Arapahoe, Jefferson and Adams Counties)
- New York-Newark-Jersey City, N.Y.-N.J.-Pa.
- San Jose-Sunnyvale-Santa Clara, Calif.
- Dallas-Fort Worth-Arlington, Texas