Since the first quarter of 2020, home prices have risen 26% across the nation, while the number of listings on the market fell 62% in the same time period, NerdWallet reports. Even as rising mortgage rates put a damper on heated buyer competition, inventory remains below pre-pandemic rates, meaning that prices might not fall as quickly as many priced-out buyers may have hoped.
A lack of market affordability is especially detrimental for first-time buyers unable to afford the average list price in the nation’s most popular metro areas. Inflation significantly outpaced income growth at the start of 2022, with homes in the most populous metro areas costing six times the typical first-time buyer income.
For the first time, the least affordable metros weren’t only on the West Coast. Miami joined the least-affordable five, nudging out Riverside, California. Those metros where homes are furthest out of reach for first-time buyers include Los Angeles, where first-quarter list prices were 12 times first-time buyer income; San Diego, which reached double digits for the first time (10); San Jose (9.4); Sacramento (8.5); and Miami (8.5).
For the second quarter in a row, Pittsburgh was the most affordable metro area, and again the only one where homes met the threshold for affordability — three times first-time buyer income. Other affordable metros include: Cleveland (3.1), Detroit (3.5), Buffalo, New York (3.6); and Baltimore (3.7).
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