Tag Archives: affordable housing markets

While the state of Arizona recently limited homebuilding in the Phoenix area, a new report from Redfin revealed out-of-town homebuyers are still moving to popular Sun Belt metros despite the high risk of drought and flooding.

On a national scale, with 20 percent down, a buyer would need to earn a salary of $48,603.82 to afford the median-priced home. Of course it is possible to buy a home with less than a 20 percent down payment, but a lower down payment means the buyer’s salary must be higher to afford the same home. In the national example above, a purchase of a median-priced home with only 10 percent down and including the cost of PMI increases the income needed to $56,140.44, an increase of $7,500.

Level of affordability varies by state with Washington D.C., Hawaii and Alaska all being less affordable now than in the pre-bubble years. In Washington D.C. the current payment-to-income ratio is 40 percent, which is lower than the 62 percent ratio shown at the peak of the housing bubble. Michigan, Texas, and Florida currently have ratios under the national average, with Michigan having a low ratio at 16.9 percent.