By DON FENLEY
TRI-CITIES, Tenn. – Sullivan Co. kept the dubious distinction of having the least affordable housing in the Appalachian Highlands in the current version of Atlanta Federal Reserve Bank’s Homeownership Affordability Tracker. The numbers are valid, but the issue begs some context as the push for more affordable housing progresses.
The tracker rated Greene Co. as the only regional market where those who bought are spending 30% or less of their income on housing. Typically, 30% of gross income is considered the affordability boundary.
Civic and government officials are paying extra attention to housing affordability as the region tries to cope with a housing shortage and a population dynamic increasingly dependent on home prices and rents.
So far, most of the focus has been on home prices. They have mushroomed across the Appalachian Highlands because housing demand has outstripped the local supply. But there’s no magic bullet that will roll housing prices back. In fact, they’re likely to continue increasing.
Affordability has more moving parts exerting pressure on affordability than just home prices. Wages, interest rates, taxes, insurance, and job creation are in the crucible and require equal attention for a context-based examination of the issue. It’s necessary because there’s no one-size-fits-all affordability number.
One example is the 30% affordable boundary itself. There are five core income benchmarks that can be used to consider what’s affordable and what’s not. Here’s those benchmarks, the target monthly individual’s housing cost using the 30% option. The benchmarks are based on Census regional data for the Johnson City, Kingsport-Bristol TN-VA Combined Statistical Area (CSA).
Median household income – $50,007 – $1,250
Median family household income – $67,596 – $1,690
Median nonfamily household income – $27,281 – $682
Per capital income – $30,562 – $764
Median worker income – $33,022 – $826
Median wage full-time male worker – $50,847 – $1,271
Median wage full-time female worker – $40,544 – $1,014
Meanwhile, mortgage rate averages, which are a big contributor in the affordability calculations, have hovered in the 6.5% range since early February. That doesn’t mean most local buyers are getting the best rate. Mortgage originators say most deals going out the door at 7%, or better.
Here’s how the rising rates have boosted the monthly out-of-pocket cost to buyers:
Higher rates have increased the average monthly mortgage costs by $65 since last year.
Affordability has been increasing in the Greeneville Micropolitan District since October last year. The improvement pace has picked up dramatically since the first of the year.
JOHNSON CITY METRO
Higher rates have added $289 a month to the average mortgage payment since this time last year.
Affordability in the three counties of the Johnson City metro area began declining in May 2021. The decline bottomed out in Oct. last year and has slowly improved since then.
Since this time last year, higher rates have added $306 a month to the average mortgage payment.
Affordability in the Sullivan and Hawkins market began declining in Oct. 2021. That trend bottomed out in October of the following year and slowly improved until the first of this year, when it began declining again.
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