A trifecta of housing reports this week attempt to make sense of housing market statistics
First, ATTOM Data Solutions released its Q4 2018 U.S. Home Affordability Report, which shows that the U.S. median home price is the least affordable since 2008.
ATTOM’s affordability index is based on percentage of income needed to buy a median-priced home relative to historic averages, with an index above 100 indicating median home prices are more affordable than the historic average, and an index below 100 indicating median home prices are less affordable than the historic average.
Nationwide, the affordability index declined 3 points to 91 from the previous quarter, toppling from 106 in late 2017. In Q3 2008, the index was 87.
Seventy-six percent of the 469 U.S. counties ATTOM analyzed posted a Q4 2018 affordability index below 100, meaning homes were less affordable than the long-term affordability averages for the county. That was down from a 10-year high of 78 percent of counties posting an affordability index below 100 in Q3 2018.
"While poor home affordability continues to cloud the U.S. housing market, there are silver linings in the local data as home price appreciation falls more in line with wage growth," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "Affordability improved from the previous quarter in more than half of all local markets, and one in five local markets saw annual wage growth outpace annual home price appreciation, including high-priced areas such as San Diego, Brooklyn and Seattle."
That's a bit of good news for home shoppers who face less competition as homes stay on the market for longer. But inventory levels are still well below where they were five years ago, and small increases have yet to meaningfully reverse those deficits. A year ago, inventory fell 9.1 percent on an annual basis.
According to Zillow, the typical U.S. home is worth $222,800, up 7.7 percent year-over-year. Las Vegas and Atlanta home values grew the most since last November, with the median home value in each metro increasing by more than 13 percent. But while Atlanta surpassed its bubble peak value in mid-2017, the Las Vegas market is still 12.5 percent below the highest point it reached during the housing bubble.
Curiously, Zillow’s subsidiary Trulia, issued its own report announcing that the number of homes for sale nationwide tumbled 4.6 percent year-over-year in the last three months of 2018 across all price categories, according to the latest Inventory and Price Watch Report . “This marks the ninth consecutive quarter of declining inventory; the last time inventory rose was in Q3 2016,” said the report. “However, there are signs of progress with the nation's most expensive housing markets seeing large inventory gains.”
For those keeping score, the housing markets bucking the trend were in California.
i The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/research/data.