Wage growth has largely failed to keep up with rising home prices in many major metro areas across the nation, according to RealtyTrac's 2016 Home Affordability Index. The real estate data firm's latest study shows 9 percent of U.S. counties are less affordable than their historical normal levels, up from 2 percent one year ago.“We could kind of see this coming," said Daren Blomquist, senior vice president at RealtyTrac. "It really is about the absence of wage growth to me. But how the market has taken off-- has really not been supported by a recovery in the broader economy, or at least a robust recovery. That’s why you see 61 percent of the counties we looked at where home price growth outpaced wage growth.”[Tweet "@RealtyTrac: The average earner dedicates 30.2%/month of income toward the #mortgage"]Nationally, the average wage earner needs to dedicate 30.2 percent of income per month toward the mortgage -- both property taxes and insurance included -- on a median...
- Home price is outpacing wage growth in 61 percent of markets, while wage growth is outpacing home price in 39 percent of markets.
- Major contenders for unaffordability include New York City and San Francisco, which also top the list for the five most-populated county housing markets that are less affordable than years past.
- Chicago, located in Cook County, has only seen 3 percent wage growth year-over-year, but the city is within the top 20 county housing markets for most affordable compared to historical norms.
- While jobs might be soaring, income levels aren't helping offset the costs in many major cities.