Home affordability watch: The 10 fastest-growing metro areas

This Wednesday, Oct. 3, 2018, photo shows a home offered for sale in the Atlanta suburb of Roswell, Ga. Atlanta has the most affordable housing among metros where population is booming, and Seattle’s housing is least affordable. (AP Photo/John Bazemore)

Raise your hand if you know someone who recently moved to Atlanta, Dallas-Fort Worth or Houston. A lot of hands went up, because those are the three fastest-growing metropolitan areas in the U.S. _ and they have relatively affordable home prices.
NerdWallet calculated home affordability for the 10 metro areas that had the most population growth from mid-2016 to mid-2017, the latest data available from the U.S. Census Bureau. Among them, Atlanta had the most affordable home prices this spring and Seattle had the least affordable.
Affordability was estimated by comparing each metro area’s median household income with the monthly principal-and-interest payment for a median-priced single-family home in the second quarter. After a 20 percent down payment, house payments were calculated at an interest rate of 4.71 percent, the average rate for a 30-year fixed-rate mortgage in the second quarter in NerdWallet’s daily mortgage rates survey.
The three most affordable metros for buying a home have two things in common, says Danielle Hale, chief economist for Realtor.com: space to grow and local governments that “are more willing to permit and allow development, too.”
The rankings were compiled using data from the National Association of Realtors, the Census Bureau and NerdWallet.
FASTEST-GROWING METRO AREAS BY HOUSING AFFORDABILITY
1. ATLANTA-SANDY SPRINGS-ROSWELL, GEORGIA
Median home price: $228,800
Median household income: $62,613
Principal and interest payment: $950 (equivalent to 18.2 percent of median monthly income)
Population growth: 89,013
Atlanta had the lowest median house price among the 10 fastest-growing metro areas and the fifth-highest household income. The combination of wages and house prices put Atlanta at the top for house affordability.
2. HOUSTON-THE WOODLANDS-SUGAR LAND, TEXAS
Median home price: $244,400
Median household income: $61,708
Principal and interest payment: $1,015 (19.7 percent of monthly income)
Population growth: 94,417
Houston’s affordability comes courtesy of having this list’s third-lowest house prices and sixth-highest household income.
3. DALLAS-FORT WORTH-ARLINGTON, TEXAS
Median home price: $268,200
Median household income: $63,812
Principal and interest payment: $1,114 (21 percent of monthly income)
Population growth: 146,238
The Metroplex had the fourth-highest income on the list and the fourth-lowest house prices, making it third most affordable. It was the fastest-growing metro.
4. WASHINGTON, D.C., METRO AREA
Median home price: $443,100
Median household income: $95,843
Principal and interest payment: $1,841 (23 percent of monthly income)
Population growth: 65,908
The Washington-Arlington-Alexandria metro area sprawls across the District of Columbia and parts of Virginia, Maryland and West Virginia. Prices were second-highest among these 10 metros and incomes were highest.
5. AUSTIN-ROUND ROCK, TEXAS
Median home price: $330,200
Median household income: $71,000
Principal and interest payment: $1,372 (23.2 percent of monthly income)
Population growth: 55,269
The Texas capital had the fourth-highest house prices among the fastest-growing metro areas and third-highest household income.
6. TAMPA-ST. PETERSBURG-CLEARWATER, FLORIDA
Median home price: $238,700
Median household income: $51,115
Principal and interest payment: $992 (23.3 percent of monthly income)
Population growth: 54,874
Tampa-St. Pete had the second-lowest house prices on this list. But affordability took a hit because it had the lowest household income.
7. PHOENIX-MESA-SCOTTSDALE, ARIZONA
Median home price: $272,000
Median household income: $58,075
Principal and interest payment: $1,130 (23.3 percent of monthly income)
Population growth: 88,772
Phoenix had the third-lowest household income on this list, along with the fifth-highest home prices.
8. ORLANDO-KISSIMMEE-SANFORD, FLORIDA
Median home price: $269,000
Median household income: $52,385
Principal and interest payment: $1,117 (25.6 percent of monthly income)
Population growth: 56,498
This tourist magnet had the second-lowest incomes on this list, trailing only Tampa-St. Pete. But house prices were higher, striking a blow to affordability.
9. RIVERSIDE-SAN BERNARDINO-ONTARIO, CALIFORNIA
Median home price: $360,000
Median household income: $58,236
Principal and interest payment: $1,495 (30.8 percent of monthly income)
Population growth: 57,017
With the third-highest house prices among the top 10, but the fourth-lowest household income, many residents of the Inland Empire have to stretch to afford a home.
10. SEATTLE-TACOMA-BELLEVUE, WASHINGTON
Median home price: $530,300
Median household income: $78,612
Principal and interest payment: $2,203 (33.6 percent of monthly income)
Population growth: 64,386
The Emerald City had the second-highest household income among the top 10 and the highest house prices. With a typical house costing more than half a million dollars, it’s difficult to afford a house payment even on Seattle’s relatively high incomes.
This article was provided to The Associated Press by the personal finance website NerdWallet. Holden Lewis is a writer at NerdWallet. Email: hlewis(at)nerdwallet.com. Twitter: (at)HoldenL.
RELATED LINKS
NerdWallet: Buying a house in 2018: What you need to know https://nerd.me/homebuying-101
 

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