U.S. Housing Affordability Slips as Prices, Rates Surge
(Bloomberg) -- Recent income growth has not been sufficient to keep up with rising interest rates and home prices, according to a new report from Black Knight, a real estate data and analytics firm. The increase in prices and rates has driven up the monthly payment on a median-priced home purchased with a 20 percent down payment by $150 per month, Black Knight said. This monthly increase equates to about a 14 percent rise since the start of 2018 -- far outpacing income gains.
On a geographic level, the report shows that Washington, D.C. requires the largest share of median income (40 percent) to purchase the median-priced home, followed by California (38 percent). Ben Graboske, executive vice president of Black Knight’s data & analytics division, noted that compared to the 1995-2003 period, nearly seven percentage points of additional income now is needed to purchase a median-priced home in the nation’s capital.
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