U.S. homes were generally less affordable in the first quarter compared with a year earlier, according to RealtyTrac’s Home Affordability Index.
As per the index, 9% of U.S. county housing markets were less affordable than their historically normal levels in the first quarter. That’s a marked increase from 2% of markets in the first quarter of 2015.
Affordability, however, improved in certain markets.
The report shows that a worker with a median salary for his area needs to use about 30.2% of his annual income in order to make mortgage payments, as well as to pay taxes and insurance, on a median-priced home. (That’s assuming the borrower has a 30-year fixed-rate mortgage and made a 3% down payment.)
That’s up significantly from the first quarter of 2015, when a worker with a median salary had to use about 26.4% of his income in order to cover mortgage, tax and insurance payments on a median-priced home.
However, it is a significant decrease from 2006, when the average wage-earner needed to spend about 53.2% of his monthly wages to buy a median-priced home.
The least affordable county in the first quarter was Kings County, N.Y. (Brooklyn), where the average wage-earner would need to allocate 120.4% of his salary in order to afford a median-priced home. Rounding out the top five least affordable counties were Marin County, Calif., with 109.2%; Santa Cruz County, Calif., with 106.9%; New York County, N.Y. (Manhattan), with 105.1%; and San Francisco County, Calif., with 95.3%.
The top five most affordable counties were Wayne County, Mich. (Detroit), with 8.5%; Baltimore County, Md., with 9.2%; Clayton County, Ga., with 10.1%; Bay County, Mich., with 11.5%; and Rock Island County, Ill., with 12.3%.
The report also looks at housing markets where price growth outpaced wage growth.
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