Sell Your Home Using These Simple Tips

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5 Tips to Prepare Your Home to Sell

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Selling Your Home Using the Right Agent for You!

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Rising Home Prices vs. Slow Income Increases

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Article via California Association of Realtors:

U.S. Home Prices Are Surging 13 Times Faster Than Wages
Source: Bloomberg

In yet another troubling sign regarding the affordability of homeownership, new data shows that the growth in U.S. home prices is beating wage increases 13 to 1. RealtyTrac found that home price appreciation has outpaced wage growth in 76 percent of U.S. housing markets during the past two years.

Making sense of the story

  • Wages climbed by 1.3 percent from the second quarter of 2012 to the second quarter of 2014, compared to a 17 percent increase in home prices during that time.
  • “Home prices in many housing markets across the country found a floor in 2012 and since then have rapidly appreciated, particularly in markets attracting institutional investors, international buyers or some other flavor of cash buyer not constrained by income as much as traditional buyers,” said Daren Blomquist, vice president at RealtyTrac.
  • Among the 184 metro areas analyzed, the average wage growth over the two years ending Q2 2014 was 3.7 percent while the average home price appreciation in the two years ending in December 2014 was 13.4 percent.
  • Metropolitan statistical areas with the highest ratio of price appreciation to wage growth included Merced, Calif. (141:1), Memphis, Tenn. (99:1), Santa Cruz, Calif. (94:1), Augusta, Ga. (78:1), and Palm Bay-Melbourne-Titusville, Fla. (62:1).
  • Other metro areas where home price appreciation has outpaced wage growth by a wide margin during the housing recovery included Sacramento, Calif. (17:1 ratio), Riverside-San Bernardino, Calif. (15:1 ratio), Las Vegas, Nev. (14:1 ratio), and Detroit (12:1 ratio).
  • Among the 140 markets where home price appreciation has outpaced wage growth during the housing recovery, 45 metro areas (32 percent) with a combined population of 63 million had a median home price in December that required more than 28 percent of the median income for monthly mortgage payments.
  • Experts believe those markets with the biggest disconnect between price growth and wage growth during the last two years are most likely to see plateauing home prices in 2015 until wages catch up.

To view the Bloomberg Business article in full click here.