Tags: homes | price | wage | growth

Homes Quickly Turning Unaffordable

By    |   Tuesday, 07 April 2015 06:20 AM

Home prices have risen steadily risen in the past three years, and that's a good thing for homeowners and those working or investing in the residential real estate industry.

But wage gains, haven't kept pace, and that's making homes unaffordable for many Americans. The median price for an existing home rose 7.5 percent in the 12 months through February to $202,600.

Meanwhile, average hourly wages climbed only 2.1 percent in the 12 months through March, matching the average pace since the economic recovery began in June 2009. That leaves average pay at just $24.86 an hour.

So when it comes to housing, while "most markets are still affordable, we're getting to a point where if that trend continues the markets may be in danger," Daren Blomquist, vice president of real estate research firm RealtyTrac, tells MSNBC.

In some markets, such as South Florida, home prices already are out of reach for many workers. Interestingly enough, this phenomenon has pushed rental prices higher, as those who can't afford to buy homes are renting.

According to RealtyTrac, home price appreciation has outpaced wage growth in 76 percent of U.S. housing markets during the past two years.

Meanwhile, you might think that people who stopped paying their mortgages in the wake of the financial crisis aren't making out so well when it comes to housing.

Well think again.

"Thousands of Americans who have skipped years of mortgage payments are still living in their homes," writes Michael Corkery of The New York Times. And "now a legal quirk could bring a surreal ending to" the foreclosure cases. "They may get to keep their homes without ever having to pay another dime."

And why is that? Because the cases have taken so long to wind their way through the courts that statutes of limitations have been exceeded in multiple states.

Many of these homeowners are in Florida, New Jersey and New York, Corkery reports.

And the situation is unlikely to be resolved soon. "We probably have one or maybe two more years to go until it is all over," Mark Zandi, chief economist at Moody's Analytics, tells The Times.

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Home prices have risen steadily risen in the past three years, and that's a good thing for homeowners and those working or investing in the residential real estate industry.
homes, price, wage, growth
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2015-20-07
Tuesday, 07 April 2015 06:20 AM
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