A booming real estate market is great for home sellers and anyone connected to the real estate industry, but a new caution — it has recently been reported that home prices are rising faster than wages across the country – and Des Moines is not immune.
From the Des Moines Business Record:
RealtyTrac said the Des Moines-West Des Moines market had an affordability index of 112; 100 is the norm, and numbers below that mean an area has become more affordable with higher figures meaning less affordability.
RealtyTrac reported that Des Moines-West Des Moines residents spend 21.9 percent of their income on their house, well below many real estate agents’ rule of thumb of 30 percent. The first-quarter median price of $145,250 was up 8 percent over the previous year.
The report, based on home sales data and federal wage reports, found that home price growth exceeded wage growth in nearly two-thirds of the nation’s housing markets so far this year. Among the least affordable counties were those that include Omaha, St. Louis, Denver, New York City, Dallas and Austin, Texas.
Home prices in 9 percent of the U.S. housing market are now less affordable than their historic norms, the RealtyTrac report found. That means home buyers have less money for other purchases.
You can read the full study from RealtyTrac here: http://www.realtytrac.com/news/home-prices-and-sales/q1-2016-realtytrac-home-affordability-index/