MReport June 2020

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54 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Affordability Worsening for First-Time Buyers Nearly half of the 50 largest metros saw home prices more than five times the income of first-time buyers. A new study by NerdWallet found list prices were more than five times the median first-time homebuyers' incomes from January to March in 20 of the 50 largest metros. Also, the number of active list- ings fell 19% year over year from Q1 2019. Across the nation, the afford- ability ratio was 4.5 during Q1 2020—first-time homebuyers could expect to see homes listed at about 4.5 times their income. San Francisco has one of the highest average list prices for the quarter ($938,347) but it also has one of the highest median incomes for first-time homebuyers ($131,460). NerdWallet states just one metro—Pittsburgh—had a quarterly average list price at or below three times the income of first-time homebuyers. Three other metros came in behind Pittsburgh: Buffalo, New York; Cleveland, Ohio; and St. Louis, Missouri, as all list prices were 3.1 times the median income. Twenty-eight cities had afford- ability ratios above the national average (4.5) and 10 had list prices more than six times the local in- come for potential first-time buyers. The Los Angeles-Anaheim-Long Beach metro was found to be the most unaffordable metro in the nation. The average list price for first-time buyers in Los Angeles was $952,656—more than 12 times the average income for a first-time buyer ($77,551). San Diego had an affordability ratio of 8.9; San Jose-Sunnyvale- Santa Clara had an affordability ratio of 8, and San Francisco- Oakland-Hayward had an afford- ability ratio of 7.1. Also, 39 of the 50 most popu- lated metros across the U.S. saw home prices rise in Q1 2020 by a rate of 4% annually. Prices in Houston; Minneapolis; and Louisville, Kentucky, declined the most (4%) over the past year. However, prices rose 10% or more in six areas. Los Angeles saw the biggest gain at 21%. The National Association of Realtors (NAR), however, reported first-time buyers were responsible for 36% of sales in April, which is up from 34% in March 2020 and 32% from April 2019. NAR's 2019 Profile of Home Buyers and Sellers, released in late 2019, found the an- nual share of first-time buyers was 33% in 2019.

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