ARAMCO Report - The Mother of ALL Mortgage Blogs!

74 percent of U.S. housing market unaffordable for average wage earners

Posted by Mehran Aram on Mon, Sep 30, 2019 @ 06:09 AM

A cooling off the housing market has not translated to more affordable homes for the average household in the U.S. ATTOM Data Solutions reported last week in its Q3 2019 U.S. Home Affordability Report that homes in 371 of 498 U.S. counties analyzed are simply too expensive for average wage earners.

The most unaffordable markets in the nation included Los Angeles, Orange and San Diego counties. These same regions topped the list in the previous quarter as well.

Affordability was determined by calculating the amount of income needed make monthly house payments on a median-priced home, assuming a 3 percent down payment and a 28 percent debt-to-income ratio and compared it to weekly income data in each region.

Today, conforming no-point 30-year fixed mortgage rates are averaging 3.75 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: San Diego County, San Diego, Wages, Mortgage rates, home affordability, ATTOM Data Solutions, Affordability, households, Unaffordable Markets

Advanced degrees pay off for house-hunters

Posted by Mehran Aram on Fri, Jul 19, 2019 @ 05:07 AM

In the current housing market where mortgage payments can eat up a large part of the median salary, having an advanced degree can go a long way. A new study conducted by Zillow shows that in many high-priced California cities, homes are largely limited to those with the advanced degrees that yield higher salaries.

The analysis found that median mortgage payments are affordable for those with a high school education in 36 of the 50 largest U.S. metros. The remaining 14 markets require wages associated with at least two-years of college. Income levels for university graduates are necessary to afford a median priced home in many West Coast metros including San Diego.

In even pricier markets like San Jose and San Francisco, monthly mortgage payments are within the brackets of those earning the typical income of someone with a post-graduate degree.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.00 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Housing Market, Wages, Zillow, Mortgage rates, Mortgage Payments, House Hunters, Advanced Degree

Real estate history repeats itself

Posted by Mehran Aram on Wed, Jul 17, 2019 @ 05:07 AM

Wage increases not keeping up with the rising cost of living has been plaguing the housing market for several years, but a new study of historical trends shows that this dilemma has been frustrating buyers for decades.

A report from Clever Real Estate shows that median home prices have surged 121 percent nationwide since 1960 while household income increased just 29 percent. Renters have also felt the pain of rising prices with a 72 percent increase since 1960.

Homes in the West have felt this problem more acutely as median home prices have risen 195 percent over the past five decades, compared to wages rising only 26 percent over the same time period.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.00 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Housing Market, Wages, Renters, household income, home buyers, median home price, Cost of Living, Historical Home Prices

Wage struggles for Calif. renters

Posted by Mehran Aram on Sun, Jun 30, 2019 @ 08:06 AM

A worker in California will need to make nearly $35 per hour to afford to rent a two-bedroom home in the State according to a new report. This amount is three-times the current minimum wage and makes California one of the most unaffordable rental markets in the nation.

A report released by The National Low Income Housing Coalition shows that California ranked second in hourly wages required to afford median rent prices. Hawaii took the top spot. The rankings were based on the cost of a two-bedroom dwelling based on the concept that living costs should take up no more than 30 percent of monthly income.

As it is with overall housing costs, San Diego costs more for renters. A resident would have to make nearly $40 per hour to afford rent prices. The average renter in San Diego makes $20.78 per hour of work.

Today, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: San Diego County, San Diego, California, Wages, Mortgage rates, San Diego Housing Market, rental market, Wage Struggles, Minimum Wage, National Low Income Housing Coalition, Hourly Wages

U.S. home affordability drops to 10-year low

Posted by Mehran Aram on Wed, Dec 26, 2018 @ 05:12 AM

A report released last week by ATTOM Data Solutions only confirmed what homebuyers have been feeling for quite some time – affordable homes are increasingly difficult to come by. The Q4 2018 U.S. Home Affordability Report showed that the U.S. median home price during the fourth quarter was at the least affordable level since Q3 2008 – more than a 10-year low.

The index posted a reading of 91, down from 94 in Q3. Readings below 100 suggest that the current median home price is less affordable than the historic average. 357 out of the 469 U.S. counties analyzed in the report had readings below 100.

The silver lining according to a statement made by Darin Blomquist, senior vice president at ATTOM, is that annual wage growth outpaced annual home price appreciation. This includes in high-prices areas such as San Diego.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.625 percent, 15-year rates near 4.0 percent and the 5-year ARM averaging 4.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Wages, home affordability, median home price, wage growth

Wages not keeping pace with home prices

Posted by The Aramco Group on Wed, Jul 22, 2015 @ 14:07 PM

Simple supply and demand economics can be blamed for the seemingly endless increase in home prices. Low inventory and high buyer demand is a combination that had the median single-family home price increase 8.6 percent since last year. According to the National Association of Realtors affordability index, home prices are rising at a harmful pace compared to wages.

Lower mortgage rates are also aiding in the increase by not offsetting prices enough. Today’s rates are historically low with the current conforming no point 30-year fixed rates averaging 4.125 percent and 15-year fixed rates averaging 3.25 percent.

The index showed that housing affordability dropped from 161.2 last year to 159.7 in 2015. The decrease in affordability was seen nationwide with the biggest drop taking place in the Midwest and the smallest in the West at 5.8 and 2.6 percent respectively.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381–8888 and your question may be featured in an upcoming article.

Topics: home prices, Wages

ARAMCO Report - Thursday April 30, 2015

Posted by The Aramco Group on Thu, Apr 30, 2015 @ 15:04 PM

Inflation hoped for by Fed, shows slight rise

Minutes from the Federal Reserve’s last meeting, released April 29, 2015, maintained the bank’s optimistic tone about the economy despite a weak first quarter this year. Labor statistics and related economic indicators in particular continued to move toward fulfilling the Federal Reserve’s expectations about inflation.

According to a report from the Labor Department, released on 4/30/15, the cost of employing the average U.S. worker climbed 0.7 percent in the first quarter of 2015. This is one of the most closely watched measures of wage inflation, and employment costs have risen 2.6 percent over the past 12 months.

The Federal Reserve’s ten committee members voted unanimously to keep short-term interest rates between 0.0 – 0.25 percent in April, where it has been since December of 2008, but they left a summer rate hike on the table. The Fed will be gauging reports like this one and the two major upcoming jobs reports before its next meeting in June.

As for long-term interest rates, homebuyers and homeowners looking to refinance will find that conforming no point 30-year fixed mortgages average 3.75 percent while 15-year mortgages average 3.0 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: Interest Rates, Fed, Labor Department, Department of Labor, 30 year fixed rates, Federal Reserve, Wages

ARAMCO Report - Tuesday March 31, 2015

Posted by The Aramco Group on Wed, Apr 1, 2015 @ 15:04 PM

The Consumer Confidence Index (CCI) increased in March according to The Conference Board. It indicates that Q1 2015’s dramatic economic slowdown is probably a blip. The rejuvenated labor market and increasing home prices were the two largest contributors to consumers’ returning confidence. The index jumped 2.5 points to 101.3 from 98.8, defying previous projections that it would drop to around 96. Those numbers are benchmarked to the consumer confidence in 1985. That year was neither a peak nor a trough and has a score of 100. The Federal Reserve consults the CCI and today’s news fits with the Fed’s plan to gradually increase rates later this year. RealtyTrac announced today that wages are not keeping up with home prices however. Appreciation outpaced wage growth in 76 percent of the metro areas tracked (140 our of 184) which underlines that consumer confidence and the economy on the whole are getting better but are not yet fully healed.

Meanwhile conforming no point 30 year fixed mortgage rates average 3.75 percent with 15-year rates closer to 3 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

 

Topics: home prices, CCI, The Conference Board, Consumer Confidence Index, 30 year fixed rates, Wages, Appreciation