{"id":64835,"date":"2019-01-22T23:45:27","date_gmt":"2019-01-23T07:45:27","guid":{"rendered":"https:\/\/redfindevelop.wpengine.com\/blog\/?p=64835"},"modified":"2020-10-06T12:58:37","modified_gmt":"2020-10-06T19:58:37","slug":"homes-for-sale-increases-but-fewer-homes-affordable-to-middle-class","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/homes-for-sale-increases-but-fewer-homes-affordable-to-middle-class\/","title":{"rendered":"As the Number of Homes For Sale Increases, Fewer Homes are Affordable to Middle Class Buyers"},"content":{"rendered":"

Although the number of homes for sale is increasing rapidly in some markets, the number of affordable homes for sale is falling.<\/h2>\n

We have written a lot recently about rapid growth in the supply of homes for sale<\/a> in many markets such as San Jose and Seattle. But with both home prices and interest rates<\/a> up from a year ago, both the number and share of homes for sale that are affordable to a typical household has actually decreased even as total homes for sale are increasing.<\/p>\n

For this report we considered all homes that were active on the market at any point in 2018 and 2017. We calculated the share of homes in each metro area that were affordable during each year to a household making the median income in that metro area, assuming a 20 percent down payment, an interest rate of 4.64 percent for 2018 and 3.95 percent for 2017, and a monthly mortgage payment no more than 30 percent of gross income.<\/p>\n

Just 14 percent of homes that were on the market in 2018 in the San Jose metro area were affordable on the median household income in the area of $117,000. This is a big drop from 2017, when 26 percent of homes that were for sale were affordable. In Los Angeles, 16 percent of homes for sale were affordable in 2018, down from 20 percent in 2017. In Seattle the share of affordable homes for sale dropped from 58 percent in 2017 to 46 percent in 2018.<\/p>\n

\"Metro<\/figure>\n

Home price gains and interest rate increases<\/a> through 2018 combined to considerably reduce home affordability, so even though the number of homes for sale is increasing the number of affordable homes on the market has decreased in most metro areas.<\/p>\n

\u201cHomeownership is increasingly out of reach for the typical American,\u201d said Redfin chief economist Daryl Fairweather. \u201cOver the last few years builders have focused on luxury homes, and there hasn’t been enough construction of affordable starter homes.\u201d<\/p>\n

In many metro areas, even as the number of homes for sale has increased, the number of affordable homes for sale has shrunk over the past year. In the San Diego area, there were 10 percent more homes for sale during 2018 than 2017, but the number of affordable homes for sale fell 16 percent. In the Seattle metro, there were 4 percent more homes for sale, but the number of affordable homes for sale fell 17 percent.<\/p>\n

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