Attom Data Solutions said wages in Hamilton County grew 2% in the past 12 months, or only half the 4% growth rate in local home prices in the past year. But the typical home in Chattanooga is still selling for 27.2% less than the U.S. average, or more than twice the disparity in worker pay between Chattanooga and the rest of the country.
“Although housing affordability remains a concern, historically housing is still relatively affordable,” said Geoff Ramsey, president of the Chattanooga Realtors association. “Although Freddie Mac recently reported that the 30-year fixed rate is at its highest average in seven years, reaching 4.94%, average rates were 5.97% 10 years ago, 6.78% 20 years ago and 10.39% 30 years ago.”
The average home in Hamilton County sold this fall was priced $65,575 less than the U.S. average, Attom reported.
The housing study found the average wage earner in Hamilton County was paid $49,790 in annualized wages this year, or enough to afford average priced home in Chattanooga with at least a 3% down payment.The average worker would have to spend 28% of their income to buy the average home, which Attom said is within housing guidelines for affordability.
Nationwide, the typical worker was paid $56,381. But with the U.S. average home price of $241,250, the typical U.S. worker would have to spend 35% of his or her income to buy an average home in the United States.
Such a spending level is the highest in more than a decade and well above the historical average of 32%, Attom said. It also exceeds the recommended housing guidelines for the amount a homebuyer should spend in a home purchase.
“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.”
Like in Chattanooga, most cities had bigger gains in home price than wages in the past year. Annual home price appreciation in the fourth quarter of 2018 outpaced annual average wage growth in 366 of the 469 counties analyzed by Attom.
Tribune Content Agency