Housing Price Gains Continue Cooling in Metro Areas

Housing price gains continue to cool as we progress further into 2019, with year-over-year appreciation rates showing a notable drop across the country. Two of the most expensive metro areas in the country also show signs of a decreasing rate of appreciation, according to data compiled by mortgage resource HSH.com.

In the 50 most populous metropolitan areas across the United States, the median annual home price increase in Q2 2019 stood at 3.93 percent, a pronounced drop compared with the Q2 2018 appreciation rate of 6.60 percent. The figure at the same point in time for 2017 was 7.04 percent, illustrating a clear downward trajectory in home appreciation in these areas.

Two of the metro areas which also stand as some of the most expensive actually recorded year-over-year decreases in their respective median prices: San Jose and San Francisco, Calif. Oklahoma City, Okla. also recorded a year-over-year decrease, though it stands apart as one of the most affordable metropolitan areas in the country.

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Key to a general improvement in housing affordability is observed decreases in mortgage rates. While rates were rising in Q2 of 2018, where a 30-year fixed-rate mortgage averaged 4.66 percent for that period. In Q2 2019 that figure has been reduced by over one-half of a percentage point to 4.14 percent, HSH notes.

Because of still-rising wages, there were only two markets in Q2 2019 where the year-over-year increase in salary needed to purchase a median-priced home was greater than the increase in wages in that same period of time: Columbus, Ohio and Austin, Texas.

“As such, and while still a problem, it looks as though affordability is improving, at least based on this reference point,” says HSH in a press release announcing the data.

Also updated was the organization’s list of the most- and least-affordable housing in metropolitan areas based on income, which was last recorded in March. Pittsburgh, Penn. maintains its position as the most affordable metropolitan area in the country, while Oklahoma City, Okla. has overtaken Cleveland, Ohio for the number two spot on the “most affordable” list.

The three least affordable metropolitan areas in the country have each maintained their respective positions, all within the state of California: San Jose, San Francisco and San Diego, requiring between a $127,000 and $250,000 annual salary in order to feasibly live in those areas.

Read the full analysis of housing affordability data at HSH.

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  • Based purely on performance, I have never been a strong supporter of the H4P product. Back in 2008 H4P was touted as being capable of becoming equal in volume to the traditional HECM by the turn of the last decade.
    The house building industry has been both good for the industry and fickle to it at the same time. It is sad how members of the industry have come away from large meetings of Realtors telling us how easily Realtors gravitate towards H4P only to see the lack of increased HECM endorsements from these meetings. Salespeople hate rejection so usually give a lot of faint praise to salespeople who do not sell their products.

    With falling mortgage interest rates, one has to ask what is causing this lowering in the appreciation rates. What will happen when these rates go up?

    H4P maybe sleeping but has no history to show that it is a giant. I have yet to meet a sleeping giant. The idea that H4P is a sleeping giant is clearly the stuff of fairy tales not mortgages.

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