30 June 2022
A new report out this week from ATTOM, a data company, found home prices continues to rise 10% annually in 2/3rd of the country. The report cites rising price and mortgage rates as factors driving unaffordability across the nation.
“As historic affordability continues to decline, major home-ownership expenses on typical homes are now unaffordable to average local wage earners during the second quarter of 2022,” the report stated.
Many of the counties in the Triangle are ranked the lowest on the report’s affordability scale.
The median price of a home in Wake, Durham, and Orange County increased between 22-30% in the last year. At the same time, wages have only grown by 5%. This difference makes owning a house less affordable in these areas than in the past.
The overall unaffordability of homeownership is also paired with rising costs for owners once they do own a house.
This month a John Burns Real Estate Consulting report found owning a home now costs $839 more a month than renting; $200 more than at any other point. Last year, the monthly cost was about equal.
The Raleigh-Durham market has the highest disparities between rising homeownership costs and rising rents. The experts predict rental demand will rise due to this growing gap in cost.
While renters might be slightly better off in terms of monthly expenses, rent is also rising.
Apartment List found rent in the Raleigh-Durham area increased by 2% just in the last month.
Rising rent paired with inflation leaves renters struggling to save.
“I haven’t been able to save anything,” said Daniel Hatch, a renter in Raleigh.
Hatch said his rent increased by about 10% in the past year. He said while he would love to eventually own a home, it’s not a feasible option at the moment.
“The price of homes are increasing at a faster rate than the median income, which is a serious problem,” he said.
Community Home Trust is an organization that is working to permanently create affordable housing across Orange County.
“We sell homes at an affordable rate and then when folks move out of their homes, they sell them back to us and we can resell them again at an affordable rate. So all the homes in our inventory stay affordable forever,” explained Daniele Berman, the communications manager for Community Home Trust.
The group has about 270 properties that they are able to sell at prices 30-50% below market cost.
“It’s a huge difference. It gives people an opportunity to get into a neighborhood that they really want to be part of it at a price they can afford,” Berman explained.
The market challenges of low supply, increased construction costs also plagues the work Community Home Trust does.
“I’d say the biggest challenge is to supply there’s so much need. There’s so many folks who want to be able to go to a home that’s affordable, and that their family can be in,” Berman said. “There’s just not enough out there.”
Berman encourages anyone interested in homeownership to reach out. The group also offers financial literacy and planning assistance.
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