Home prices across the Washington region may run significantly higher than the nation as a whole. But in terms of affordability, it’s effectively a wash.
The local region scored very close to the national rate in the National Association of Home Builders’ second-quarter affordability ranking.
The quarterly report looks at about 180 metro areas, comparing median monthly family income divided by the mortgage payment for a median-priced single-family home at existing mortgage-interest rates.
The higher the resulting percentage of income required, the greater the affordability challenge.
For the Washington region in the second quarter, the figure was 39 percent, based on a typical home-sales price of $666,600 and a median family income of $152,700. That’s up 5 percentage points from the first quarter of 2024, owing to a rising median home-sales price in the D.C. region (the median family income did not change).
While the numbers were significantly different, the percentage was (almost) the same at the national level. With a $412,300 home-sales price divided into a $97,800 household income, the resulting figure was 38 percent.
In 14 out of 176 markets surveyed, in the second quarter, the typical family is “severely cost-burdened” (must pay more than 50% of household income on a median-priced existing home). In 89 other markets, families are “cost-burdened” (need to pay between 31% and 50%). The remaining 73 markets have rates of 30 percent or less.
San Jose-Sunnyvale-Santa Clara, Calif., was the most severely cost-burdened market during the second quarter, where 94 percent of a typical family’s income is needed to make a mortgage payment on a median-priced existing home. This was followed by San Francisco-Oakland-Berkeley, Calif. (79%); San Diego-Chula Vista-Carlsbad, Calif. (76%); Urban Honolulu, Hawaii (76%); and Naples-Marco Island, Fla. (74%).
By contrast, Decatur, Ill., was the least cost-burdened market, where families needed to spend just 15 percent of their income to pay for a mortgage on a median priced home. Rounding out the least burdened markets were Cumberland, Md.-W.Va. (17%); Springfield, Ill. (18%); Elmira, N.Y. (18%); and Peoria, Ill., and Binghamton, N.Y. (tied at 19%).
The D.C. region had the 60th biggest affordability challenge. Among other Virginia metro areas, Richmond (with a ratio of 36%) was 76th and Virginia Beach (32%) was 107th.
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Find the full survey and methodology at https://tinyurl.com/ehf966b2.