Eight Best Marketing Practices to Fund New Loans Faster

Join our expert panelists to learn which best marketing practices will help you get to your customer quickly with your best offer – and win their business for another loan term.

engage.marketing event: All eyes on purchase

To help power your business forward, we’re bringing together the smartest minds in purchase mortgage marketing to share the insights, tactics and strategies that set leaders apart.

Behind the executive exodus at Fannie Mae

What's behind the wave of executive departures at Fannie Mae? It's not just money, according to former employees of the GSE.

2021 Agent Rankings now live

Today RealTrends + Tom Ferry announce the 16th annual The Thousand of America's top 1,000 real estate sales and professionals and teams.

Real Estate

ATTOM: Housing affordability falls to 10-year low

New data reveals housing affordability index has sunk to lowest point since Q3 2008

U.S. Home Affordability is the worst it has been since 2008. Woah.

According to a report from ATTOM Data Solutions, Q1 2018 home affordability was at its lowest since Q3 2008. The Home Affordability Index has fallen from 102 to 95, the lowest since Q3 2008’s index of 86. This index is based on the percentage of income needed to buy a median-price home relative to historic averages. Index scores above 100 indicate more affordability, whereas scores below 100 indicate less affordability.

The data for the report was gathered from statistics on 432 U.S. counties with a combined population of more than 217 million.

"Slowing home price appreciation in the second quarter was not enough to counteract an 11% increase in mortgage rates compared to a year ago, resulting in the worst home affordability we've seen in nearly 10 years," ATTOM Data Solutions Senior Vice President Daren Blomquist said in a statement.

"Meanwhile home price appreciation continued to outpace wage growth, speeding up the affordability treadmill for prospective homebuyers even without the rise in mortgage rates," he added.

According to the report, in 64% of local U.S. markets, home prices were rising faster than wages. Since hitting rock bottom in Q1 2012, median home prices in the nation have increased by 75% while weekly average wages have only increased by 13% in the same time period. The median home price this quarter was $245,000, a 4.7% increase year-over-year, which is well above the growth in average weekly wages of 3.3%.

What this means is that for 75% of the average wage earners, median-price homes are out of range, based on a 3% down payment and a maximum front-end debt-to-income ratio of 28%. This is true of counties like Los Angeles County; Cook County (Chicago); Maricopa County (Phoenix); San Diego County; and Orange County, California.

On average, the average wage earner would have to spend 31.2% of his or her income to buy a median-priced home, but there are many counties where this percentage is much, much higher.

In the San Francisco area, the average wage earner would have to dedicate 133.2% of his or her income to buying a median-priced home. For average wage earners in Brooklyn, the number is 123.1%. Santa Cruz registers 121.5%, and in Monterey County, California, the percentage is 100.3%.

These numbers reflect a well-documented trend of affordability problems around the nation with no end in sight. Slow wage growth in a strong economy, inventory shortages and construction costs are largely to blame for the worsening state of affordability.

"The home affordability challenge is no longer just a coastal big city problem. It has spread inland to markets such as Denver, Nashville, Austin, Charlotte and Atlanta. While those markets are still less expensive and require a lower percentage of income to buy a home than the trophy coastal markets such as San Francisco, Los Angeles, Seattle, New York and Washington, D.C., they are further out of sync with their historic affordability averages than the coastal markets," Blomquist told HousingWire.


Most Popular Articles

Fannie Mae gives go-ahead for digital verification

Fannie Mae has given mortgage servicers the green light to use third-party digital vendors to verify income and asset information. Mortgage tech firms are thrilled.

Jun 10, 2021 By

Latest Articles

Mortgage forbearance drops as expiration date nears

Mortgages in forbearance fell for the 15th consecutive week last week to 4.04% of servicers’ portfolio volume ― a 12 basis point decline, according to a survey from the Mortgage Bankers Association.

Jun 14, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please