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Home Affordability Plummets Across America



                  Home Affordability Plummets Across America

Sharp Increases in Home Prices, Mortgage Rates More Than Offset Slight Income
Gains

PR Newswire

CHICAGO, Oct. 23, 2013

CHICAGO, Oct. 23, 2013 /PRNewswire/ -- It's harder for a median-income
household to afford a median-priced home in all of the top 25 U.S. markets
this year, according to a new Interest.com report. A median-income household
can only afford a median-priced home in eight of the nation's 25 largest metro
areas (down from 14 out of 25 last year).

On average, home prices rose nearly 16% over the past year in the 25 cities,
while incomes rose by about 3%. And the national average for a 30-year
fixed-rate mortgage rose from 3.70% to 4.43%. That alone added $84.50 to the
monthly payment on a $200,000 mortgage.

"The simple fact is that the very small improvement Americans have seen in
their paychecks hasn't kept pace with a jump in home prices and mortgage
rates," said Mike Sante, managing editor of Interest.com.

Atlanta is the most affordable market (a median-income household exceeds the
amount required to purchase a median-priced home by 25%), and San Francisco is
the least affordable (a median-income household falls a whopping 48% short of
being able to afford a median-priced home).

The full rankings are available at:

http://www.interest.com/mortgage/news/big-city-housing-less-affordable/

                                                             Least Affordable
Most Affordable Metropolitan Areas*                          Metropolitan
                                                             Areas*
1.         Atlanta                                           21.       Miami
(+24.92%)                                                    (-24.56%)
2.         Minneapolis                                       22.       Los
(+23.86%)                                                    Angeles (-30.31%)
3.         St. Louis (+17.94%)                               23.       New
                                                             York (-35.82%)
4.         Detroit                                           24.       San
(+16.87%)                                                    Diego (-37.71%)
5.         Pittsburgh                                        25.       San
(+11.33%)                                                    Francisco
                                                             (-47.93%)
*Percentages reflect how much the median household income in a metropolitan
area exceeds or

falls short of the income required to purchase a median-priced home in that
area

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To determine each rating, Interest.com gathered the median home prices in the
25 largest U.S. metropolitan areas and calculated how much financing would be
required for a buyer with a 20% down payment. Interest.com entered that amount
and city-specific data on 30-year fixed-rate mortgage rates, median household
income, median property taxes, average homeowners insurance costs and average
household debt into the "Required Income Calculator" on Interest.com. Finally,
Interest.com divided the median household income for each city by the income
required to finance the median-priced home.

Median Home Price Source: National Association of Realtors, Q2 2013 study of
existing single-family homes [Pittsburgh and Detroit were not included in that
study, so Q2 2013 data from Real STATS was substituted for Pittsburgh and July
2013 data from RealComp (the Michigan Multiple Listing Service) was
substituted for Detroit]

30-Year Fixed-Rate Mortgage Rate Source: Bankrate.com, weekly national survey
from October 1, 2013 [Portland (Ore.), Sacramento and San Antonio were not
included in that report, so the national average was used for those three
markets]

Median Household Income Source: U. S. Census Bureau, 2012 American Community
Survey, median household incomes by Metropolitan Statistical Area

Median Property Taxes Source: U. S. Census Bureau, 2012 American Community
Survey, median real estate taxes by Metropolitan Statistical Area

Average Homeowners Insurance Source: National Association of Insurance
Commissioners, 2010 average premiums by state

Average Household Debt Source: Experian's 2012 State of Credit Study [Notes:
did not include mortgage debt; Interest.com calculated monthly non-mortgage
debt payments using an 8% interest rate amortized over 60 months]

About Interest.com:

Since it was created in 1994, Interest.com has been helping consumers make
smart financial decisions. Interest.com's stories, calculators and interest
rate tables also appear on the websites of more than 100 newspapers in 31
states, including the Los Angeles Times, the Chicago Tribune and the Dallas
Morning News.

Interest.com is owned by Bankrate, Inc., which is among the largest and most
trusted providers of personal finance advice and information on the Web.

For More Information:

Ted Rossman
Public Relations Manager
ted.rossman@bankrate.com
917-368-8635

SOURCE Interest.com

Website: http://www.interest.com
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