Rise of the Rentals

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46 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ANALYTICS The LaTesT 41% of Homes Unaffordable on two Median incomes only one in 10 homes currently for sale fit within a single-median-salary budget. n ational home prices have experienced double-digit increases for the past two years, and prices continue to rise. In contrast, inflation-adjusted me- dian household income is nearly the same as it was about 25 years ago, according to Redfin. A median salary can afford only 10 percent of homes cur- rently for sale in the nation's 40 largest cities, according to Redfin. Even households with two me- dian salaries cannot afford more than half of homes on the market today. With two median incomes, about 41 percent of homes become affordable, according to Redfin. Redfin reviewed non-distressed homes currently on Multiple Listing Services and income information from the Bureau of Labor Statistics as of 2012. Redfin considers a home "affordable" if a monthly mortgage payment is no more than 28 percent of a house- hold's gross monthly income. In Los Angeles; San Diego; and Santa Ana, California, just 1 percent of homes are affordable on a median salary. Households with two median incomes can afford 12 percent of homes in Los Angeles and 9 and 7 per- cent of homes in San Diego and Santa Ana, respectively, according to Redfin. A typical doctor's salary can afford more than 90 percent of homes in 21 of the 40 cit- ies, Redfin observed. However, even doctors struggle to afford homes in San Francisco. Just 23 percent of homes are afford- able on a doctor's salary in San Francisco. Of the large metros observed, the city where the greatest percentage of homes is avail- able on one median income is Philadelphia, where a median in- come brings 26 percent of homes into the affordable range. Two median incomes in Philadelphia bring 61 percent of homes into the affordable range. In Hartford, households with two median incomes fare even better. They can afford 78 percent of homes on the market. Redfin's findings concur with recent data from Zillow reveal- ing median-income earners in Southern California; the Bay Area; Portland, Oregon; Denver; and Miami cannot afford more than half of homes for sale in their market. The LaTesT

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