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NIMBYomics 101: Median-Priced Homes Not Affordable for Average Wage Earners in 68 Percent of U.S. Housing Markets

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

NIMBY (Not In My Back Yard) zoning and land use controls combined with slow wage growth since 2007 and The Federal Reserve asset bubble-blowing have combined to make 68 percent of US housing markets are simply unaffordable.

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Attom Data Solutions has released a report showing that 68% of US housing markets are not affordable for average wage earners. And “The Coast Is The Most” in terms of unaffordability for average wage earners. And the following map is for 28% up-front Debt-to-income (DTI) and 3% down payment in select housing markets.

thecoast.png

The Attom report highlights the problem with NIMBYomics: the economics of zoning and local land use constraints. The “megalopolis corridor” running from northern Virginia up to Massachusetts along with Florida and the West Coast generally have strict zoning laws preventing construction of new homes (including multifamily). With growing populations and The Fed’s super-low interest rate and bubble-inducing policies, we see in these NIMBY-constrained areas general unaffordability.

On a somewhat amusing (and ironic) note, the most affordable area on the west coast (denoted by green) is …Tombstone Arizona (and Fort Huachuca).

This graphic from Attom is a variation of the affordability charts I usually produce.

2018.03.28attom.png

My charts show that US home prices are growing over twice as fast as average wage growth since 2012.

hoyswage

On top of slow wage growth and rapidly growing home prices, we have the problem of the Dodd-Frank/Consumer Financial Protection Bureau overreach in terms of banking/lending regulation as a whiplash reaction to the financial crisis resulting in fewer low credit score borrowers in ownership arena.

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Of course, with The Fed taking its foot off the monetary accelerator and mortgage rates begin to rise,  let’s see how many households will be plunged into the unaffordable bucket.

2018.03.28attommthree

Doctors, doctors (Bernanke, Yellen and Powell), give me the news. We’ve got a bad case of … housing affordability.  (Jerome Powell is a Juris Doctor).

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Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

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