Housing market purchasing power is in danger in these 12 cities

Housing market purchasing power is in danger in these 12 cities

[ccpw id=”6606″]

The ongoing supply and demand imbalance in the housing market is already making the 2018 home buying season especially competitive.

Years of pent-up demand is finally coming to market, creating an overflow of house hunters. Meanwhile, a long run of historically low levels of new home construction has crippled supply. As prices keep rising, existing owners are becoming increasingly reluctant to put their homes on the market.

This lack of inventory is driving up home prices across the country, while rising mortgage rates are putting a damper on how much would-be buyers can afford to borrow.

A First American analysis of home values that factors in local wages and mortgage interest rates in large cities found a 5.1% prices increase nationally in February. But in some markets, real home prices rose as much as 17.84%, sending purchasing power plummeting, according to First American’s Real Home Price Index.

For example, in Seattle, real house prices grew more than 11% year-over-year in February to a median sales price of $452,166. And in Boston, real house prices rose 6.9% annually to a median sales price of $405,597.

Here’s a look at 12 housing markets where homebuyer purchasing power is in danger. The data, from First American’s RHPI, measures home price changes, taking local wages and mortgage rates into account “to better reflect consumers’ purchasing power and capture the true cost of housing.”

The February 2018 data is ranked by largest year-over-year increases in RHPI for cities where the current value is less than 100 (an RHPI reading of 100 is equal to housing conditions in January 2000).

Original Source