Score for Spokane market drops by 15 percent in year
NATIONAL ASSOCIATION OF REALTORS-At the national level, housing affordability is down from a year ago, and fewer households can afford the active inventory of homes currently for sale on the market based on their income. That’s among the findings of a joint research conducted by the National Association of Realtors and realtor.com, a leading online real estate destination.
Using data on mortgages, state, and metro area-level income and listings on realtor.com, the Realtors Affordability Distribution Curve and Score is designed to examine affordability conditions at different income levels for all active inventory on the market. A score of 1.0 or higher generally suggests a market where homes for sale are more affordable to households in proportion to their income distribution.
According to March data, the states with the lowest affordability score are Hawaii (0.52), California (0.57), and Oregon (0.60). They’re followed by the Montana, Rhode Island, and the District of Columbia, all of which had scores of 0.64.
In those areas, households at the median income level can afford only 19 to 23 percent of the active housing inventory.
The National Association of Realtors’ affordability score for Spokane-Spokane Valley is 0.69, a nearly 15 percent drop from 0.81 a year ago.
The states with the highest affordability score were Ohio (1.12), Indiana (I.09), Kansas (1.09), Iowa (1.07), and West Virginia (1.05). In these areas, a typical household can afford 54 percent to 62 percent of the active housing inventory currently on the market.
By looking at the data by metropolitan statistical area, more metro areas experienced weakening affordability conditions (45) compared to improving conditions (35) from a year ago.
The markets with the lowest affordability scores include the California MSAs of Los Angeles-Long Beach San Diego-Carlsbad, San Jose-Sunnyvale, Oxnard-Thousand Oaks-Ventura, and San Francisco-Oakland, where scores range from 0.35 to 0.48, and a typical household can only afford 3 percent to 11 percent of the active housing inventory.
The Youngstown-Warren, Ohio-Pennsylvania market had the highest affordability score at 1.25, followed by Dayton, Ohio (1.19), Toledo, Ohio (1.18), Akron, Ohio (I.I6), and Scranton-Wilkes-Barre, Pennsyl vania (1.11). In those areas, the typical household can afford nearly 75 percent of the homes that are currently on the market.
Lawrence Yun, NAR chief economist, found a notable imbalance between what potential homebuyers can afford and what’s listed for sale in a given community.
“The survey confirms that the lack of entry-level supply is putting affordability pressures on too many buyers-especially those at the lower end of the market, where demand is the strongest,” Yun says. “This is why first-time buyers continue to struggle finding affordable properties to buy and are making up less than a third of home sales so far this year.”
The affordability score decreased nationally from 0.86 to 0.84 between March 2017 and March 2018, because of rising prices across the country and a spike in mortgage rates.
However, 13 states and the District of Columbia had better affordability compared to a year earlier, with the greatest increase in affordability in the District of Columbia (to 0.64 from 0.59), Vermont (to 0.84 from 0.81), Hawaii (to 0.52 from 0.50), and North Dakota (to 0.97 from 0.95).
Thirty-five metro areas had better affordability compared to a year earlier, led by Austin-Round Rock, Texas (to 0.66 from 0.55); Syracuse, N.Y. (to 1.1 from 1.04); North Port-Sarasota, Fla. (to 0.66 from 0.60); and Palm Bay-Melboume, Fla. (to 0.77 from 0.71).
“We’ve seen affordability improve as inventory declines have begun to lessen in these areas. More balanced supply-and-demand dynamics have kept listing price growth below the national average, providing some much-needed relief for stretched home buyers in these areas,” says Danielle Hale, chief economist for realtor.com.
Yun says, “Wages are growing, which is welcome news for prospective buyers, but prices are increasing at a faster rate, up almost 6 percent in the first two months of 2018. Solutions to improve these conditions include more homeowners selling, investors releasing their portfolio of single-family homes back onto the market and more single-family housing construction.”
The Realtors Affordability Distribution Curve and Score was created to be a valuable resource for Realtors and consumers to assess the affordability of markets in different income groups.
Chicago-based National Association of Realtors claims to be America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.
Realtor.com, which has provided digital real estate technology and data for the past 20 years, is operated by New York-based News Corp. and offers a comprehensive source of for-sale properties.
Number of states in which affordability has improved.
This article provided by NewsEdge.