Median home prices are surging in much of the country, according to a 2018 study by ATTOM Data Solutions. The study examined 446 U.S. counties, and revealed that 304 of them, or 68%, lacked affordable homes, based on average local incomes.
ATTOM’s study calculated the amount of annual gross income that would be required to afford a mortgage payment for the median home price in each county. It assumed a minimum down payment of 3%, and a maximum “front end” debt-to-income ratio of 28%. (Obtain our free e-book, “How to Buy a Home like a Pro” to see how debt-to-income ratios and other factors affect your home purchase power!)
Unsurprisingly, the coastal areas of the U.S. had the worst home affordability. Here in Central Ohio, home affordability is a very mixed bag! Franklin County is deemed “affordable” based on the study’s use of a median home sales price of $154,250, and an average annual wage of $48,176.00.
The hyper-local problem is many neighborhood homes are priced at $200,000 and higher, often much higher! In fact prices of $180,000 and under in our Columbus metro market are now labeled as “Affordable Housing.”
Other Central Ohio counties, such as Delaware, Licking and Fairfield, were deemed “unaffordable” because their median home prices have moved past what the average, annual income in the area could buy.
Affordable homes are a moving target. ATTOM’s study found that “net migration” is increasing in areas where home affordability is good, and declining in areas where home prices are the highest. Home buyers are willing to take on longer commutes, or even relocate out-of-state, in their quest for affordable homes. As the quest spills over into neighboring areas, the increased home demand boosts prices there, too.
Please keep in mind that the ATTOM study used a fairly narrow set of criteria. Many things affect your home purchase power, including your income, down payment amount and mortgage interest rate. Being fully financially prepared for your home purchase, and using the guidance of an Exclusive Buyer Broker, puts you on the right path!
As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA-M, CNE, CSP, PSA, e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services, www.buyershome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
