Middle-class home buyers are struggling to find enough affordable homes on the market as rising prices, higher interest rates, and flat incomes limit their choices.
More than half of homes for sale this month in 14 of the 100 largest metros were out of reach for middle-class home buyers, according to a new study by Trulia. The real estate company based affordability rates on a monthly payment — after a 20 percent down payment as well as taxes and insurance costs — that was less than 31 percent of the metro area’s median household income.
Though housing affordability for the middle class appears to be the most problematic in California, other metros are also seeing affordability lessen by big margins.
Despite the drops, overall housing affordability nationwide still remains high historically. In 40 of the 100 metro areas, 70 percent or more of the homes remained within reach to middle-class buyers. Also, home prices remain 5 percent undervalued based on long-term price, income, and rent levels, Jed Kolko, Trulia’s chief economist, told USA Today.
More info. at source: “Middle-class buyers see fewer affordable homes,” USA Today (Oct. 10, 2013)