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.
Liquidity moves markets!Follow the money. Find the profits!
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.
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.
My charts show that US home prices are growing over twice as fast as average wage growth since 2012.
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.
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.
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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