Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 106 NUMBER 39 ■ MECKTIMES.COM
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Mortgage rates decrease slightly
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Homeownership still unaffordable across most of U.S. But declining home prices may provide relief for homebuyers ATTOM, has released its third-quarter 2022 U.S. Home Affordability Report showing that median-priced singlefamily homes and condos remain less affordable in the third quarter of 2022 compared to historical averages in 99 percent of counties across the nation with enough data to analyze. That continues to be far above the 69 percent of counties that were historically less affordable in the third quarter of 2021 and marked yet another high point reached during the country’s 11-year housing market boom. However, the report also shows some potential relief for homebuyers as the portion of average wages nationwide required for median major home-ownership expenses has dipped slightly from 30.9
percent in the second quarter of the year to 30 percent in the third quarter. “Homeownership remains largely unaffordable for the majority of homebuyers in the majority of markets across the country,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “While home prices have declined a bit quarter-overquarter, they’re still higher than they were a year ago, and interest rates have essentially doubled. Many prospective homebuyers simply can’t afford the home they hoped to buy, and in many cases no longer qualify for the mortgage they’d need.” The third-quarter figure does remain above the 28 percent ceiling lenders generally like to see when
issuing a mortgage. It also is well above the 23.4 percent level from a year ago. But the current decline in the portion of wages needed to afford the typical home nationwide marks the first quarterly improvement in almost two years and comes as the median national single-family home price has taken a rare thirdquarter fall. The latest median value of $340,000 is down 3 percent from the second quarter of 2022 – the first Spring-to-Summer decline since 2008. The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage, property taxes and insurance — on a
median-priced single-family home, assuming a 20 percent down payment and a 28 percent maximum “front-end” debt-toincome ratio. That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics (see full methodology below). Compared to historical levels, median home prices in 574 of the 581 counties analyzed in the third quarter of 2022 are less affordable than in the past. The latest number is up from 568 of the same group of counties in the second quarter of 2022, 398 in the third quarter of 2021 and just 284, or less than half, two years ago. The increase has continued as the median national home
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“The higher rates of mortgage application denials and withdrawals in high-flood-risk areas are an encouraging signal that buyers and lenders are more often including flood risk in their decision-making.” Nicole Bachaud Zillow
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