Half of the nation’s top 10 most expensive markets were in California, including San Jose-Sunnyvale-Sta. Clara, Calif. ($1,875,000; 25%); San Francisco-Oakland-Hayward, Calif. ($1,380,000; 15%); Anaheim-Sta. Ana-Irvine, Calif. ($1,260,000; 26%); Urban Honolulu, Hawaii ($1,127,900; 19.9%); San Diego-Carlsbad, Calif. ($905,000; 18.5%); Boulder, Colo. ($859,100; 18.2%); Los Angeles-Long Beach-Glendale, Calif. ($792,500; 13.1%); Seattle-Tacoma-Bellevue, Wash. ($746,200; 14.2%); Naples-Immokalee-Marco Island, Fla. ($745,000; 24.3%); and Denver-Aurora-Lakewood, Colo. ($662,200; 19.4%).
With sustained price appreciation and higher mortgage rates, affordability greatly worsened in the first quarter of 2022. The monthly mortgage payment on a typical existing single-family home with a 20% down payment rose to $1,383, which is up $319, or 30%, from one year ago. Families typically spent 18.7% of their income on mortgage payments (14.2% one year ago).
“Declining affordability is always the most problematic to first-time buyers, who have no home to leverage, and it remains challenging for moderate-income potential buyers, as well,” Yun added.
The mortgage payment on a 10% down payment loan on a typical starter home valued at $313,000 rose to $1,363 during the quarter. That is an increase of $313 from one year ago or 30% from one year ago.
First-time buyers typically spent 28.4% of their family income on mortgage payments, thus making a home purchase unaffordable. A mortgage is considered unaffordable if the monthly payment (principal
The NAR reports that a family needed at least $100,000 to afford a 10% down payment mortgage in 27 markets (up from just 20 markets in the previous quarter). However, a family needed less than $50,000 to afford a home in 63 markets (81 markets in the prior quarter).