Homes became more affordable in Jefferson County and St Charles County during the first quarter of this year from the 4th quarter of 2019, according to data just released by ATTOM Data Research. As the table below shows, the affordability index for both those counties increased from the prior quarter as well as from the same quarter the prior year. Franklin County’s affordability index was the same for the 1st quarter of 2020 as the prior quarter but improved by 5% from a year ago. The two St Louis’s, the city and county, both saw decline in home affordability from both the prior quarter as well as the prior year.
Average wage earner can qualify to buy in 3 out of 5 Counties…
So while the city and county of St Louis saw a decline in home affordability, the average wage eaarner in those two areas can qualify to buy a home, as can an average wage earner in Franklin County.
According to a report just released this morning by ATTOM Data Research, it’s cheaper to buy a home than rent in 6 of 8 St Louis metro area counties covered in the report. The data reported also shows, however, that home prices are rising faster than rents in all of the counties, a trend that, if it continues, could make buying a home a less affordable option in the future. The data also shows, on a postiive note, that in 6 of 8 counties wages are rising faster than rents. The counties are split when it comes to wages vs home prices however, with wages rising faster than home prices in 4 and home prices rising faster than wages in the other 4.
Affordabilty is determined by the percentage of wages necessary to purchase a home in a given County. Based upon this criteria, the most affordable county to buy a home is the City of St Louis at 20.1%, followed by Madison County, IL at 27.3% and then St Louis County at 27.6%. The least affordable county to buy a home on the list is St Charles County at 45.3%
One of the nice things about St Louis has always been that it’s an affordable place to live and an affordable place to own a home. However, as St Louis home prices, and mortgage interest rates, continue to increase, home affordability in St Louis has declined.
As the table below, which is based on data from ATTOM Data Research, shows, all of the counties reported on in the State of Missouri saw home affordability decline during the 3rd quarter with the exception of Jackson County (Kansas City). All of the counties had a decline in home affordability from a year ago with St Louis County seeing the biggest decline at 11%.
St Louis Home Affordability – 3rd Quarter 2018
St Charles Homeowners spend the largest percentage of income on a home…
In St Charles County, home buyers spend, on average, 41.3% of their income to buy a home, the highest percentage of the reported counties in Missouri. In the city of St Louis, the percentage of income spent on housing was just 21.9%.
Percentage of Annualized Wages Necessary to Buy A Home
Home affordability throughout the St Louis area declined in the fourth quarter of this year from the same time last year according to a report released this morning by Attom Data Solutions. As the table below shows, the affordability of homes in the St Louis area, as well as every major county in Missouri (with the lone exception being Platte County), declined during the current quarter meaning that it now takes a larger percentage of a persons income (based upon average wages for the county) to buy the “typical” home in that county (based upon a median-priced home).
The table shows St Louis County with a 24% decline in home affordability from a year ago, however, I should point out that Attom Data Solutions actually chose to leave this information off their report released to the public due to concern about the underlying data. For example, their data showed a 33% increase in the median home price in St Louis County during the current quarter from the 4th quarter in 2015 however, as the two tables shows for St Louis County home prices below, there has really only been an increase of 5.7% in the price from last year. The median price of homes sold in St Louis County during 4th quarter of 2015 was $175,000, for the current quarter it is $185,000. I’m not sure how much the correct home pricing would change Attom’s affordability index for St Louis County but, given the fact their data for the current median home price is pretty close, that makes the current data fairly accurate in that regard. With that said, the current affordability index for St Louis County is an 89, the lowest of any of the counties in Missouri, which is not good. An index of 100 means that home affordability is at the historic “norm”, above 100 means it’s more affordable than the historic norm, below 100 means less affordable than the historic norm. Locally, Jefferson County has the best affordability index, with a 112, followed by St Charles County with a 109.
With affordability on the decline, and interest rates projected to increase to as high as 5% by the end of next year, if you are thinking about buying a home and, in a position to do so now, I would suggest consider buying sooner than later.
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One of the many benefits to living in the St Louis area has long been the affordability of good homes in nice neighborhoods, but that has even gotten better in the past year in three of the 5 major counties that make up the St Louis market. As the table below shows, in Franklin County, due to lower home prices as well as interest rates, home affordability increased by 9 percent from May 2015 to May 2016. Jefferson County, as well as the city of St Louis, also saw improvements in home affordability during the period however, St Louis County and St Charles County saw affordability slip by about 2%. (We work hard on this and sure would appreciate a “Like”)
St Louis home affordability has fallen significantly in the past year as a result of increasing home prices as well as rising interest rates, according to a report by MORE, REALTORS. As the table below shows, the hardest hit area was the city of St. Louis where a house payment on a median priced home has increased 50% from the 4th quarter of 2012 to the 4th quarter of 2013. Jefferson county and St Charles county, with the lowest increases in home prices (2% and 7% respectively) had the least amount of damage done to home affordability.
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