“While there was some moderation in price appreciation last quarter, home prices still far exceed incomes in several aspect of the country – especially in the largest markets in the South and West where new home construction simply is not keeping up with job growth,” said Lawrence Yun, NAR chief economist.
The group reports that while the national median family income rose to $71,775, increasing mortgage rates and home prices will affect Americans’ ability to buy a home, specifically in the country’s most expensive housing markets.
The following markets are accordinged to metropolitan statistical areas, with the exception of Anaheim-Santa Ana-Irvine and Los Angeles-Long Beach-Glendale, which are metropolitan divisions.
In the third quarter of 2017, the US housing supply continued to lag, pushing home prices further upward, according to the National Association of Realtors (NAR).
For the US as a whole, the average qualifying income is $46,435 and the median home price is $254,000.
Home prices increased in 92% of the largest 177 metro areas in the third quarter of 2017. Incomes aren’t keeping up with home prices, making it more difficult for homebuyers to qualify for a mortgage in the most expensive markets. The salary needed to qualify in the top-five metro areas – four of which are located in California – exceeds $110,00.
Using NAR’s data on housing affordability, we gathered a list of the US metro areas where the minimum salary required to qualify for a mortgage, after a 20% down payment, is highest. NAR assumes a mortgage rate of 3.9% for all areas, with the monthly principle and interest payment limited to 25% of income.
By the end of September, there were 1.9 million existing homes available for sale – 6.4% less than were on the market the same time last year.
Notably, the salary needed to qualify in the top-five metro areas – four which are located in California – exceeds $110,000.