Affordability. It will be the single most used word in real estate news for the next 15 months.
As the nation continues its economic recovery from the Great Recession, the industry most impacted from a negative standpoint, real estate, is facing another crisis: unaffordability. Granted, the economy is stronger than ever, but there seems to be a shortage of homes available for sale on the market. This shortage crosses all boundaries.
Housing inventory has crashed in part due to the shortage of skilled labor and buildable lots, as well as the construction industry’s willingness to build, especially affordable housing.
The affordability index is reflected in the recent report published by Attom Data Solutions indicating that in 74% of the counties surveyed, the average family can’t afford to buy the median home. Unfortunately, this trend is going in the wrong direction since this is up from 71% reported for the same sample counties surveyed by the group in 2018.
Affordability isn’t because credit scores have fallen either. The average U.S. credit score hit 680 in 2018, up from 675 the year before, the report found. That’s the biggest one-year jump since 2008.
Even though U.S. homebuilding and build permits have increased recently in a year-over-year analysis as reported surging to more than a 12-year high in August, the supply is still not enough.
In 40%, or 192 of the 480 counties analyzed by Attom Data, home prices out-paced the average weekly wage growth, while 67% of markets required buyers to put down more than 30% of their weekly income on their home.
Still, there is some good news: 82% of markets surveyed in the report showed better housing affordability than in 2018.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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