By coinnews 
00:00 Brad Smith
Americans need to earn 70% more than they did six years ago pre-pandemic in order to afford a median priced home, according to realtor.com. Still, there are signs that things are slowly shifting towards a buyer’s market even as we face affordability issues. For more on this, I’m joined by Danielle Hale, who is the Chief Economist at realtor.com. Danielle, great to have you as always here. So, where are we starting to see some of those shifts that it might be becoming a home buyer’s market?
00:49 Danielle Hale
Yeah, thanks for having me, Brad. So, uh we did see the number of homes on the market climb in our April data, but home prices continue to rise, which really hits at that affordability challenge you were highlighting. We found that if we looked at the required income that it would take to to afford the median priced home for sale, it is up to $114,000. As you noted, that’s 70% more than what you needed to earn uh just six years ago to afford the median priced home. So there this is really just putting hard numbers on the squeeze that buyers are are feeling in the housing market today.
01:46 Brad Smith
How have we seen this impact some migration trends where and the regions that are seeing more of hotspots in order for affordability to be a reality for so many potential buyers?
02:15 Danielle Hale
Yes, so we know that uh housing tends to be higher priced in large urban areas. Uh but when we look at regional trends, we are seeing more affordability in the northeast and the midwest, not the biggest markets, but often outside of those biggest markets. And people are looking for that affordability. So it’s keeping markets like uh in Toledo, Ohio in the midwest or uh Manchester, New Hampshire, right outside of Boston, very, very hot with the real estate market relatively competitive because they either uh have more affordable homes or relatively more affordable homes. Manchester in particular is a lower price market than Boston, uh for example. Um but when we think about where uh where we’re seeing more homes for sale, uh we’re seeing a lot of increase in the number of homes on the market in Southern California, uh Northern California, and also the Washington D.C. market saw a big jump in the number of homes on the market in April. So uh we are seeing more homes at the market that is going to help position buyers in a better spot when they’re trying to negotiate with sellers. Uh but this has really been a long time coming in the housing market. It’s it’s we’ve had an undersupply for a very long time.
04:11 Brad Smith
And so I kind of asked that question to set up this next question, which is how does that overlay with what we’re seeing in employment trends? And specifically coming back to this data point of Americans needing to earn $114,000 a year, 70% more than pre-pandemic to afford a median priced home. Is it happening right now on kind of a broad-based scale? And, you know, as people are trying to get approved for mortgages, does it feel like that is sustainable in getting that wage increase that’s going to allow you to pay over 15, over 30 years?
05:14 Danielle Hale
Yeah, I think that’s a great question. So one of the things that we’re seeing is that it’s harder for first time home buyers to get into the market. If you look at the home ownership rate data that came out from the government not too long ago, uh the home ownership rate fell overall, and it was really driven by declines for the youngest households. Uh so getting your foot in the door as a first time home buyer is hard. Repeat buyers uh have fared a little bit better in this housing market in part because they can leverage the equity that they’ve built up by owning a home over the years. Uh so we’re looking at some really differentiated performance depending on who you are in the housing market and whether you own or don’t own already, and also where you are. So more affordable markets, it’s a bit more competitive. Uh in in less affordable markets, you know, we’re seeing that repeat buyer able to make a move, but not so much from the first time home buyer.