Home price appreciation outpaced wage growth in 76 percent of U.S. housing markets over the past two years, the report says. The areas where home price appreciation outpaced wage growth by a wide margin included Merced, Calif. (where home price growth outpaced wage growth at a ratio of 141:1), Memphis, Tenn. (99:1), Santa Cruz, Calif. (94:1), Augusta, Ga. (78:1), Sacramento, Calif. (17:1), Riverside-San Bernardino, Calif. (15:1), Las Vegas, Nev. (14:1) and Detroit (12:1).
Despite this strong growth in prices, most markets are still affordable by traditional standards, says RealtyTrac. Of the 184 markets the company looked at, 135 of them had a median home sales price in December that required less than 28 percent of the city's median monthly income to meet mortgage payments, property taxes and insurance, a traditional standard of affordability. Markets that were “unaffordable” by this measure included Los Angeles, San Fracisco, San Jose, San Diego, Seattle, Portland, Boston and Denver.
In about a quarter of the cities tracked, wages grew faster than home prices. Those areas included Hagerstown-Martinsburg, Md.-W.Va., Wichita, Kan., Des Moines, Iowa, Gulfport-Biloxi, Miss., and Harrisburg, Pa. Other metro areas where wage growth outpaced home price appreciation during the housing recovery included New York-Northern New Jersey-Long Island, New Haven, Conn., Tulsa, Okla., and Raleigh, N.C.
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