CoreLogic’s Selma Hepp talks affordability, home prices
Today’s episode of HousingWire Daily features an interview with Selma Hepp, the deputy chief economist at CoreLogic. Selma joins us to discuss some of the data released from CoreLogic’s most recent Home Price Insights report, which looks at home price trends and economic forecasts.
During the interview, she discusses local and national home price growth acceleration and the factors behind affordability issues for first-time homebuyers. Additionally, she explains some of CoreLogic’s forecasted home price trends for the rest of 2021 and 2022 as the market starts to cool.
Here is a small preview of the interview, which has been lightly edited for length and clarity:
Elissa Branch: According to CoreLogic data, 59% of consumers looking to purchase a home reported a combined household earning of at least six figures. We compare that to 10% looking to purchase who earned less than $50,000. If affordability has become this very prominent concern for low to moderate income potential buyers, what do these numbers tell us about their actual buying potential?
Selma Hepp: Affordability is a very interesting debate because a lot of numbers get masked in the national aggregates. There’s so much difference between first time homebuyers and move up buyers because how much home price appreciation has helped move up buyers have more equity in their homes. So, they don’t have the same level of affordability challenge as first time buyers. Based on the figures from CoreLogic, it tells us that only really one in ten buyers can actually purchase a home and this is just among those who are actually looking for a purchase. Think about how many people just don’t even bother because the income is not sufficient in their local market to even compete. It’s really challenging for those folks to buy a home.
The other thing that’s important is this question of accumulated equity and having enough for a down payment. With first time buyers, they’ve had much harder challenges with this accelerated home prices to come up with that 20% down payment. New buyers coming into the market now have to come up with a larger chunk of cash and that’s very challenging, particularly if you’re making if your household makes less than $50,000 combined income. That’s incredibly difficult.
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Below is the transcription of the interview. These transcriptions, powered by Speechpad, have been lightly edited and may contain small errors from reproduction: