Zillow: US home affordability takes a hit
Posted on Friday, April 4, 2014 at 8:50:39 AM
Buyers looking into residential financing may be finding that the real estate sector isn't as forgiving as it once was, with home prices rising across the country. As a result, many people have been priced out of the market.
According to Zillow, U.S. home affordability has taken a hit, although the majority of properties are still considered within the price ranges of most Americans. For example, 66.4 percent of homes for sale are priced reasonably. Unfortunately, that changes in most major metropolitan areas. More than half of the homes listed in Miami, Los Angeles and other regions are over-priced.
"As affordability worsens, we're already beginning to see more of the kinds of worrisome trends we saw en masse during the years leading up to the housing crash," said Stan Humphries, chief economist at Zillow. "These include a greater reliance on non-traditional home financing, smaller down payments and a greater pressure to move further away from urban job centers in order to find affordable housing options."
Data from the National Association of Realtors supported this assertion. At the end of 2013, NAR's Housing Affordability Index declined to 175.8 from 196.5 in 2012. California was home to four of the most expensive housing markets in the country.