Monadnock Ledger-Transcript – In four counties, housing affordability approaches half income

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Buying and keeping a home in Rockingham County will cost you more than half of your annual income, according to a new analysis of second quarter 2022 home sales data.

In order to afford the purchase of a single-family home or condominium in the county, homeowners would need to spend 50.6% of their income, based on annual earnings of $65,884, said ATTOM, curator of real estate data across the United States.

ATTOM’s US Housing Affordability Report, released June 30, shows median-priced single-family homes and condos were less affordable in the second quarter of 2022 compared to historical averages in 97% of counties of the country with enough data to analyze. That was up from 69% of counties that were less affordable in the same quarter of 2021. It’s also the highest affordability rate since 2007, just before the housing market collapse during the Great Britain. Recession of the late 2000s.

Other granite condition data from ATTOM included:

In Strafford County, you will need to spend 43.3% of your annual income, based on $59,332 in income;

In Merrimack County, you would spend 43.1% of your income, based on $60,658 per year;

In Hillsborough County, you would spend 38.8%, assuming an income of $73,099 per year.

These four counties (out of 10 in New Hampshire) are on ATTOM’s red zone map.

ATTOM used an affordability index that measures the average person’s ability to buy a home in a given area, based on house prices and income. An index of 100 indicates that a buyer with the median income in the area has exactly enough to qualify for a mortgage on a median-priced home, and the lower the number is below 100, the less affordable a median-priced home is.

In New Hampshire, the four counties measured all had a very low affordability index in the second quarter: Rockingham, Strafford and Merrimack counties had an index of 72, while Hillsborough’s index was 75.

To put the numbers into perspective, Suffolk County in Massachusetts — which includes Boston — had an accessibility index of 80.

The report determined affordability for average earners by calculating the amount of income needed to meet major monthly homeownership expenses — including mortgage, property taxes and insurance — on a median-priced single-family home, assuming a 20% down payment and a 28% down payment “initial” maximum debt-to-income ratio. This required income was then compared to annualized average weekly wage data from the US Bureau of Labor Statistics.

Rising interest rates

Rick Sharga, executive vice president of market intelligence at ATTOM, said that in recent years the very tight supply of housing has driven up housing prices, “but housing has remained relatively affordable due to rates low mortgage rates and rising wages With interest rates nearly doubling, homebuyers are facing monthly mortgage payments that are 40-50% higher than a year ago – payments that many potential buyers simply cannot afford.

Rising mortgage interest rates combined with inflation – and fears of a recession – are starting to change the market.

“Deteriorating affordability appears to be impacting demand, which could lead to price capping or even a modest correction in some markets,” Sharga said. “Many potential buyers may choose to continue renting until market conditions improve. Others might adjust their views and look for smaller properties or homes farther from major metropolitan areas. And it’s possible that deteriorating accessibility could accelerate migration trends that the COVID-19 pandemic has triggered, as residents of high-cost, high-tax states who can now work from home seek cheaper places to work. live.

New Hampshire has been a land rush of opportunity in recent years. While it was hot before Covid, it was hot during the pandemic as city dwellers sought more suburban and rural areas in Granite State.

The most recent May state data from the New Hampshire Association of Realtors shows that while total sales volume is down, median home and condo prices continue to rise.

In May, the median price of a single-family home jumped to $460,000, a record high, after two months at $440,000.

Meanwhile, according to real estate agents, the affordability index has fallen to an all-time low of 73.

“The median income in New Hampshire is now only 73% of what is needed to qualify for the home at the median price under prevailing interest rates. In contrast, that number topped 200% as recently as February 2018,” the NHAR said.

The median condo price was also at an all time high in May – $350,000. However, the affordability index was much better for a condo than for a house. It stood at 96 in May, according to NHAR data.

Affording a home across the country has become much more difficult in recent months at a time when the U.S. housing market has surged for the 11th straight year, but also faces notable headwinds that could affect it, according to the ATTOM report. to slow down. A major force remains: home prices have continued to soar in 2022, as a large cohort of home buyers continues to seek an extremely reduced supply of properties for sale. Strong demand has helped push the national median home price up over the past year to more than double the rate of wage growth.

These articles are shared by partners of The Granite State News Collaborative. For more information, visit collaborativenh.org.

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