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Collapse In US Home Sales Confirms 'Peak Unaffordability'

• https://www.zerohedge.com

Though some signs of softness are beginning to emerge in the US housing market as home sales slump and prices in the hottest, most high-end markets have fallen - a reaction to just how unaffordable home prices across America have become - in most markets, homes have remained at their most unaffordable level since the financial crisis, as a shortage of supply and stagnant wage growth continue to conspire to weaken consumers' home buying power.

A home-price indicator created by ATTOM Data Solutions, which maintains the country's largest property database, showed that the median price for US homes during the fourth quarter was at its most unaffordable level since Q3 2008 - a more than 10-year high. The nationwide home affordability index, which measures the percentage of the average annual wage needed to buy a home compared with the historical average, slumped to 91 during the fourth quarter, down from 94 in Q3 - the third straight quarterly decline.

Across the US, the number of counties where home-price appreciation outpaced wage growth massively outnumbered counties where wages outpaced home price growth (which would make homes in those areas more affordable).

Attom

The percentage of counties that registered indexes below 100 (indicating that homes became less affordable compared with long-term averages) fell slightly from the prior quarter - but was essentially flat.

Among 469 U.S. counties analyzed in the report, 357 (76 percent) 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."

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