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The average mortgage payment is 78.3% of the state's median income. Since then, thankfully, the conditions for lending have been relaxed a little bit, although the index is still relatively low. The index had a reading of 108.3 in August 2022, which is around one-seventh of what it had been in 2006. Because there aren't as many options on the housing market, a lot of people in the United States are having a hard time finding the house of their dreams.
Half of the country may witness minor price increases, while the other half may see minor price decreases. The ability to sell their existing home at an attractive price will also be a driving factor and ensure that the supply of homes for sale won't dry up completely. Buyers with more limited purchasing ability will feel the constraints of the sellers' market a lot more.
Other Real Estate Statistics
CoreLogic HPI™ is designed to provide an early indication of home price trends. The CoreLogic Home Price Insights report features an interactive view of its Home Price Index product with analysis through August 2022 with forecasts through August 2023. United States home prices nationwide, including distressed sales, increased year over year by 13.5% in August 2022 compared with August 2021. The homeownership rate is also among the highest in the nation, at 74.8%. However, Mississippi also has the nation's highest poverty rate, with a fifth of its inhabitants living below the poverty line. Americans spend more on housing than any other expense, with an average of 35% of income dedicated to housing costs.
New Brunswick saw its average home price increase by 6% year-over-year to $266,204, while Nova Scotia's average home price increased 10% year-over-year to $385,756. PEI's average home sold price declined by 3% year-over-year to $357,521. Mortgage payments are high despite Oregon residents earning 13% more than the national average. Incomes are 22% less than the national median, but the median house price is less than half of the typical U.S. price. Homes in Connecticut cost less than the typical price across the country while the median income in the state beats the U.S. median by 20%.
Typical home price in North Carolina: $322,055 (88% of typical U.S. price)
Mississippi has some of the cheapest home prices in the United States. Incomes are also on the low side at 33% below the national median, but mortgage payments are still very reasonable for residents with average incomes. Kansas is another state that combines cheap housing prices with a median income around the national median (8% above), which makes it affordable to buy a home there.
One way people are bringing down the cost of purchasing a home is by relocating. Location is the most significant contributor to housing costs, with a typical home in Hawaii, for example, costing more than six times a typical home in West Virginia. Home prices are highest in the Northeast and West, with the highest prices concentrated around the most densely populated areas. The Prairies’ major urban markets have held onto much of their price gains over the past year.
Figure 1: Home Prices in Boise Rose Nearly 30 Percent Year-over-Year in Early 2021
As numerous buyers battled for the winning bid, house sellers witnessed a market in which their properties sold rapidly and frequently for prices over the listing price. Oregon's homeownership rate, at 64.3%, is slightly lower than the national average. Home sizes are also slightly below average, with a typical unit measuring 1,780 square feet. A lending guideline reversal from the CMHC in July 2021 abandoned previous CMHC changes that increased restrictions for mortgage insurance, namely credit score requirements and debt service limits.
In recent history, that outlier was the Great Recession, which caused both median and mean home prices to drop. The median home price in the U.S. increased by 416% from 1980 to 2020. Newly listed homes,” will be more numerous which will help power the expected increases in home sales. 7.6% above 2019, after a seeing near record high boost in the summer and early fall, but beginning to decelerate into the holidays. From there, we expect price gains to ease somewhat in 2021 and end 5.7% above 2020 levels, decelerating steadily through the spring and summer, and then gradually reaccelerating toward the end of the year.
However, rapidly rising home prices also elevate concerns about affordability, especially for potential homebuyers who might struggle with the higher downpayments that higher home prices often entail. Home prices have soared since the start of the pandemic, as documented in our new State of the Nation’s Housing report. An interactive chart released in conjunction with the report shows that rapid price increases were incredibly widespread in markets across the country. Summer survey reported lowering their monthly mortgage budget or not changing their home search criteria in response to lower mortgage rates. The other three-quarters said low rates would enable them to make a change to their home search, and the most commonly cited change was buying a larger home in a nicer neighborhood. The housing market forecast for 2022 by Realtor.com® was released in June as a mid-year update.
Starting in fall 2020 the housing market saw more than half a million fewer homes available for sale than the prior year. The market was driven by record-low borrowing rates in 2020 and 2021, as well as a supply constraint due to underbuilding. The enormous demand from first-time buyers is almost as important as the limited new supply. The current housing market is also being driven by exceptionally favorable age demographic trends.
The typical home price keeps mortgage payments affordable, even with high mortgage rates and a median income 5% lower than the nationwide median. What started off as a bright year for the housing market and the economy was soon derailed by a global pandemic and severe economic recession. As detailed by my colleague, George Ratiu, the economic rebound has been sharp, but is by no means complete and created distinct winners and losers among sectors in the economy. Read more detailed thoughts on the overall economic context and outlook, here. One of the big winners has been the housing market, which saw home sales and prices hit decade-plus highs following decade lows in the span of just a few months. We expect housing’s winning streak to continue in 2021 as seasonal trends normalize and some of the frenzied momentum fades thanks to fresh affordability challenges.
Wisconsin offers a good combination of reasonable home prices and a median income just 1% less than the U.S. median. Because of that, the average mortgage payment is affordable for what residents earn. Although Washington's median income is 20% more than the U.S. median, that's not nearly enough to match its home prices. Residents will have a hard time making the average mortgage payment work. New Jersey is home to high housing costs and high salaries (31% more than the national median).
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