Tags: Blomquist | home | affordability | price

RealtyTrac's Blomquist: Home Affordability a Major Problem

By    |   Friday, 21 February 2014 09:34 AM

While home prices soared last year, housing is becoming less and less affordable, posing a major barrier for the residential real estate market, says Daren Blomquist, vice president of RealtyTrac, a real estate data website.

"There's going to be a reality check in the spring in terms of realizing that what we saw in 2013 is not a real market," he tells CNBC. "It's a nice bounce-back market, but ultimately you need the biggest pool of potential homebuyers out there to be able to afford those homes."

RealtyTrac estimates that the monthly house payment for a median-priced, three-bedroom home bought at the end of 2013 soared 21 percent from a year earlier, CNBC reports. In parts of California and Michigan, payments jumped about 50 percent.

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"Home prices were boosted by cash buyers in 2013. And as the cash buyers move out of the market in 2014, the buyers left are not going to be able to afford the home prices as readily in some of these markets," Blomquist notes.

Home buyers will now need much higher incomes to purchase houses in these cities.

To be sure, the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index of affordability rose to 64.7 percent in the fourth quarter from 64.5 percent in the third quarter.

"Housing affordability is stabilizing at a time when pent-up demand and ongoing job growth are helping housing markets across the nation to gradually strengthen," says NAHB Chairman Kevin Kelly.

"While this bodes well for housing in 2014, builders continue to face challenges, including tight credit for home buyers, inaccurate appraisals and a shortage of workers and buildable lots."

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While home prices soared last year, housing is becoming less and less affordable, posing a major barrier for the residential real estate market, says Daren Blomquist, vice president of RealtyTrac, a real estate data website.
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2014-34-21
Friday, 21 February 2014 09:34 AM
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