Affordability continues to improve across the nation, as CoreLogic reports that 31.1% of homes sold in March were at or above the list price, returning to levels from 2000 and 2001.
The amount of homes selling at or above the list price peaked in Q2 2018 at more than 40%, which is nearly triple what it was in January 2008.
San Francisco, California, had the highest share of homes that sold at or above the list price at 69%. More than 86% of homes in Miami, Florida, were sold below the list, which is the highest in the nation. Chicago, Illinois, had 21% of homes sell at or above the list price.
San Francisco’s 2.3 months of supply in March is half of the national average, and among the lowest in the nation. Miami, however, has 11 months of supply.
The report from CoreLogic also states price pressure increases as supply drops. San Francisco saw homebuyers pay 4.6% on average more than the asking price. Homebuyers in Miami saw average discounts of 7.8% this March.
Affordability has been on the rise through the first several months of 2019. The Federal Housing Finance Agency (FHFA) reported that average interest rates on all mortgages fell 24 points from March to 4.20% in April.
While home prices rose 1.1% in Q1 2019 and increased in all 50 states, First American’s Real Home Price Index states that affordability increased for the first time since March 2016.
“In March, two main components of the RHPI swung in favor of increased affordability—continued strong household income growth and declining mortgage rates,” said First American Chief Economist Mark Fleming. “Nationally, affordability improved on a year-over-year basis for the first time since 2016.”
Home buying power has reached 2017 levels after an 11-month slowdown. Fleming states that the declining mortgage rates and rising income have led to boosted home buying power, overcoming the drag on affordability from rising nominal house prices.
Average household income 3.0% since March 2018 as of March 2019, and 56.0% since January 2000, while real house prices are 15.0% less expensive than in January 2000.