Most of the homes on the market in Sullivan and Washington counties are beyond the reach of average wage earners, according to ATTOM Data Solution’s Q1 Housing Affordability Report. Locally 77% of current listings are outside the affordability range. That’s 10% higher than the aggregate of the 483 U.S. counties in Attom’s analysis.
As high as it is, the current number is an improvement for Sullivan’s affordability status. Sullivan’s affordability index improved 9% from Q1 last year and 7% from Q4. It was the first improvement after seven straight quarters of a less affordable state.
Washington Co.’s index was down 2% from last year and unchanged from Q4.
The local affordability crunch is the result of booming sales that drove prices higher and aggressive investor investment in homes in $200,000 and under price range. The average monthly mortgage payment for a median-priced home has increased a lot faster than local wages.
The affordability index analyzes median home prices derived from publicly recorded sales deed data collected by ATTOM and average wage data from the U.S. Bureau of Labor Statistics. The affordability 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. Average 30-year fixed interest rates from Freddie Mac Primary Mortgage Market Survey were used to calculate the monthly house payments.
The analysis found that the annual income needed to buy a median-priced home in Sullivan was $30,088 and $36,651 in Washington Co.
Buying an affordable home in Washington Co. during the first three months of this year took 26.3% of the buyer’s income and 17.3% in Sullivan. Both are well below the 30% level recommended as the maximum wages to housing cost ratio.
When the median home price used in the analysis is checked against current listings, it shows that the average wage earned can afford 23% of the listings in Sullivan and 22.8% in Washington Co. The median prices used in the analysis were $124,300 in Sullivan and $150,000 in Washington.
The local housing market began its current record sales and price run in 2015, according to the Northeast Tennessee Association of Realtors Trends Report. Since then, the median-priced home in Sullivan Co. increased 42.9%, while the average payment for that median-priced home increased 34.6%. During the same period, wages in the county increased by 11.1%, according to ATTOM’s analysis.
The median sales price for a Washington Co. Single-family home during the same period increased 27.1%, and the average mortgage payment for that median-priced home increased 22.8%. County wages increased by 12.8%.
Categories: REAL ESTATE