Affordability has been the most pressing issue facing the housing recovery, particularly for middle-class buyers. Home prices have shot up dramatically over the past year, with interest rates on 30-year, fixed mortgages also growing on a steady basis. A limited inventory of available homes to sell – aggravated by sluggish new home construction starts – has created a seller's market that leaves buyers forced to adapt to the high prices of the few houses there are to choose from. Consequently, many average-income buyers have found themselves increasingly unable to afford what's available.
A new survey from real estate track Trulia shows that, in 14 of the top 100 metropolitan areas, over half of the houses up for sale were out of the price range of middle-class buyers. This is a significant step up from just a year ago, where this issue only affected eight of those same 100 metros.
"Rising prices, higher interest rates, flat incomes and fewer foreclosed homes for sale are combining to limit choices for the middle class," said Jed Kolko, a chief economist for Trulia, in a press statement.
Trulia determines middle-class affordability by comparing monthly mortgage payments to the median household income of the metro. If the former is less than 31 percent of the latter, the area is considered affordable.
Luckily for North Carolina buyers, the Tar Heel State is home to some of the country's more middle-class-friendly markets. According to Trulia's data, over 68 percent of available homes in Raleigh are affordable for middle-class buyers and Greensboro homes are even better, with 71 percent in middle-class price ranges.
Local buyers looking for even more affordable properties should consider energy efficient homes, which offer long-term savings on utility bills. For listings on green homes, contact Carolina Custom Homes of Burlington today.