Sullivan County received some strong positive housing affordability information in Attom Data Solutions Home Affordability Index.
Sullivan was the only Tennessee county among those included in the index that had a more affordable index rating than it did during Q3 last year. It was also the most affordable state county for buyers when you look at the percent of annualized income required to buy a median-priced home.
The index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate mortgage and a 3% down payment, including property taxes, home insurance, and mortgage insurance. The median home price used in the index derives from publicly recorded sales deed data and average wage data from the Bureau of Labor Statistics.
According to the index, buying a median priced home in Sullivan took 18.5% of the annual of the annualized wage of a buyer. That’s the lowest number in Tennessee.
In Washington County, the share of income to buy was 26.4%. That was closely alighed with the other Eastern Tennessee counties in the analysis – Blount (26.3%) and Hamilton (26.1%) counties.
This year has been a stronger growth year for Sullivan than Washington. Single-family resales were up 1.7% over the first eight months of last year, according to the Northeast Tennessee Association of Realtors Trends Report. And a tight inventory has boosted the average sales price by 13.9%.
The inventory crunch is tighter in Washington County’s and has taken a bite out of sales so far, this year. They’re down 12.3% for the first eight months, but that helped boost the average sales price by 8.8%.
Price growth is a factor when the Attom’s index compares it to wage growth. Sullivan had a 4% year-over-year weekly wage growth while Washington County saw a 6% increase.
Compared to the other East Tennessee counties in the index, Sullivan and Washington had the lowest median home price, and as of the third quarter, the home price growth was not increasing faster than wage growth.
This year’s Q3 index isn’t the best or worst affordability for either county.
Sullivan County’s most affordable quarter was Q1, 2013 and the least affordable was Q2 2007. In Washington County, the least affordable quarter was Q3 2007, and the most affordable were Q1 2012.
Nationwide the index found home affordability improved over Q2 in 406 U.S. county but was still worse off than a year ago in 79 counties.
“Falling interest rates in the third quarter provided enough of a cushion to counteract rising home prices in most U.S. markets and provide at least some temporary relief for the home affordability crunch,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “More sustainable relief for the affordability crunch, however, will need to be some combination of slowing home price appreciation and accelerating wage growth. Wage growth is outpacing home price growth in about half of all local markets so far, this year, an indication that a more sustainable affordability pattern is taking shape in more local markets.