Wages are starting to rise and mortgage rates have eased but affordability is still a big issue as rising house prices continue
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Wages are starting to rise and mortgage rates have eased but affordability is still a big issue as rising house prices continue.
Data from First American Financial Corporation shows that ‘real’ house prices, taking into consideration consumer house-buying power over time, decreased by 1.3% in the month from May to June but increased 9.3% year over year.
Consumer house-buying power increased 1.3% between May and June but fell 3.5% year over year.
“On a month-over-month basis, affordability improved slightly thanks to the seventh straight month of falling rates for 30-year, fixed-rate mortgages and modest wage gains. The increase in consumer purchasing power offset the gains in unadjusted house prices,” said Mark Fleming, chief economist at First American.
“However, on a year-over-year basis, with rates still higher than a year ago, affordability declined 9.3%,” he said.
Supply remains the largest single issue affecting rising prices Fleming said. “Since 2009, the number of new households has increased by 5.9 million, while the net new number of housing units has increased by 3.5 million, meaning there is a shortage of 2.4 million housing units in the United States.”
The five states with the greatest year-over-year increase in the Real House Price Index in June were: Washington (+12.5%), Michigan (+12.4%), Colorado (+10.4%), Oregon (+10.2%), and Illinois (+9.8%).
The five states with the smallest year-over-year increase in the RHPI were: Texas (+1.8%), New Jersey (+2.1%), Arkansas (+2.5%), Missouri (+3.2%), and Oklahoma (+3.6%).
Data from First American Financial Corporation shows that ‘real’ house prices, taking into consideration consumer house-buying power over time, decreased by 1.3% in the month from May to June but increased 9.3% year over year.
Consumer house-buying power increased 1.3% between May and June but fell 3.5% year over year.
“On a month-over-month basis, affordability improved slightly thanks to the seventh straight month of falling rates for 30-year, fixed-rate mortgages and modest wage gains. The increase in consumer purchasing power offset the gains in unadjusted house prices,” said Mark Fleming, chief economist at First American.
“However, on a year-over-year basis, with rates still higher than a year ago, affordability declined 9.3%,” he said.
Supply remains the largest single issue affecting rising prices Fleming said. “Since 2009, the number of new households has increased by 5.9 million, while the net new number of housing units has increased by 3.5 million, meaning there is a shortage of 2.4 million housing units in the United States.”
The five states with the greatest year-over-year increase in the Real House Price Index in June were: Washington (+12.5%), Michigan (+12.4%), Colorado (+10.4%), Oregon (+10.2%), and Illinois (+9.8%).
The five states with the smallest year-over-year increase in the RHPI were: Texas (+1.8%), New Jersey (+2.1%), Arkansas (+2.5%), Missouri (+3.2%), and Oklahoma (+3.6%).
