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The Real Estate Group (TREG) "Partners in Excellence"

The mission of The Real Estate Group, LLC is to be Hampton Roads finest provider of real estate services. Our goal is to create a company that provides absolutely the best service for our customers by fostering an environment of teamwork and a common vision. The Real Estate Group, LLC consists of an accomplished team of skilled professionals who take pride in their work and their company. We work hard to go beyond the expectations of our customers, agents, and employees.

As U.S. Home Prices Rise, Affordability Index Drops to 8-Year Low

According to ATTOM Data Solutions’ Q1 2017 U.S. Home Affordability Index, one in every four county U.S. housing markets analyzed for the report were less affordable than their historic affordability averages in the first quarter of 2017.

A total of 95 counties out of 379 counties analyzed for the report (25 percent) posted an affordability index below 100 in Q1 2017 — the highest share of markets below the normal affordability index of 100 since Q4 2009. An affordability index below 100 means that the share of averages wages needed to buy a median-priced home is above the historic average for a given market.
Nationally the affordability index in the first quarter of 2017 was 103, down from 108 in the previous quarter and down from 119 a year ago to the lowest level since Q4 2008 — a more than eight-year low. The index of 103 translates to 33.6 percent of average weekly wages needed to buy a median-priced home nationwide, below the historic average of 34.6 percent but the highest share of wages needed since Q4 2008.

“Home affordability continued to worsen in the first quarter, not surprising given the continued strong growth in home prices combined with the recent rise in mortgage rates,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Stronger wage growth is the silver lining in this report, outpacing home price growth in more than half of the markets for the first time since Q1 2012, when median home prices were still falling nationwide. If that pattern continues, it will help turn the tide in the eroding home affordability trend.”

More than 43 percent of average wages needed to buy a home in 97 counties

Average wage earners would need to spend more than 43 percent of their income — the maximum debt-to-income ratio allowed for a “qualified mortgage” under guidelines from the Consumer Financial Protection Bureau (CFPB) — to buy a median-priced home in 97 of the 379 counties (26 percent) analyzed for the report.

Markets above the 43 percent threshold included Los Angeles, San Diego, Orange, Riverside and San Bernardino counties in Southern California; Kings (Brooklyn), Queens, New York (Manhattan) and Bronx counties in New York City; King and Snohomish counties in the Seattle metro area; Santa Clara, Alameda, Contra Costa, San Francisco, San Mateo and Marin counties in the Bay Area of Northern California; and nine counties in the Washington, D.C. metro area.

“Many homebuyers have been priced out of the Seattle housing market, forcing them to buy in other counties and commute,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle housing market, where all three counties in the metro area posted worsening affordability compared to a year ago. “The data also shows that the affordability level in King County has eroded to levels we haven’t seen since 2010. Moreover, I believe that it will get worse before it gets better thanks to our growing population, inadequate infrastructure, and land constraints, which are all driving up home prices in and around the Seattle area.”

For the complete article, please see the original article on WorldPropertyJournal.com, by clicking HERE.

About The Real Estate Group

The Real Estate Group (TREG) "Partners in Excellence"

The mission of The Real Estate Group, LLC is to be Hampton Roads finest provider of real estate services. Our goal is to create a company that provides absolutely the best service for our customers by fostering an environment of teamwork and a common vision. The Real Estate Group, LLC consists of an accomplished team of skilled professionals who take pride in their work and their company. We work hard to go beyond the expectations of our customers, agents, and employees.