Mecklenburg County wages are barely keeping up with housing prices, and buyers will face more of a struggle to afford homes as mortgage rates rise, according to a new national report measuring home affordability.
Charlotte-area homebuyers still fare better than others in the U.S., where one in every four county housing markets are considered less affordable now compared to their historic norms. That’s according to Attom Data Solutions, parent company to real estate data firm RealtyTrac Inc.
In the firm’s first-quarter home affordability index, where scores below 100 are considered less affordable, Mecklenburg County earned a 102. That’s down from 110 a year ago. The national index is 103.
The report also shows:
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▪ It takes 24.8 percent of a person’s annual wage to cover the cost of buying a home in Mecklenburg, where the median sales price is $195,000. The average weekly wage was $1,175 in the third quarter of 2016, the most recent figure available.
▪ Nationally, 33.6 percent of an annual wage is needed to buy a home. The median price for a U.S. home is $225,000.
▪ In Mecklenburg County, median home prices and wage growth both increased by 5 percent from the previous year.
That’s “a bit of a wash” when it comes to making homes more affordable for buyers, according to Daren Blomquist, senior vice president at Attom. The affordability factor is further aggravated by rising interest rates. “It is more expensive to borrow money than it was a year ago,” Blomquist said.
In Charlotte, Blomquist said a limited supply of available homes also is helping to push up prices, even though wage growth is only keeping pace. Home prices in Mecklenburg County increased 32 percent since 2010, data show.
Homes are becoming less affordable nationally, according to the index.
Housing markets in the Denver metro area had the least affordable homes in the first quarter of this year, while the Philadelphia-Camden market in Pennsylvania and New Jersey was the most affordable.
In the Charlotte area, other counties considered affordable include Gaston, Cabarrus, Iredell and Catawba. North Carolina’s Union County, with a 96 index, scored as the most unaffordable in the region. Home prices there increased about 40 percent since 2010, data show.
Click on the map to see how home prices have changed in many North and South Carolina counties since 2010. The map also shows 2016 incomes by county, according to Attom Data Solutions.