Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 108 NUMBER 1 ■ MECKTIMES.COM
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TUESDAY, JANUARY 2, 2024
First Carolina Bank hires director – commercial banking, Lowry Perry, and Cary Market Executive, Bryce Ruggieri Page 2
Weidner Apartment Homes Enters the East Coast Rental Market with Acquisition of 400Unit Community, Retreat at McAlpine Creek Apartments in Charlotte Page 3
Team building activities can improve morale in the midst of a looming recession Page 4
MARGENAU: A great Christmas gift idea Page 5
GOLDMAN: Putting the ‘Ew!’ in Annual Review Page 6
Data Shows Even Wealthy Investors Aren’t Immune To Emotional Decision-Making in Real Estate Transactions Page 7
Home affordability remains difficult across U.S. during fourth quarter even as prices dip downward ATTOM has released its fourth-quarter 2023 U.S. Home Affordability Report showing that median-priced single-family homes and condos remain less affordable in the fourth quarter of 2023 compared to historical averages in 99 percent of counties around the nation with enough data to analyze. The latest trend continues a pattern dating back to 2021 of home ownership requiring historically large portions of wages around the country. The report also shows that major expenses on median-priced homes consume 33.7 percent of the average national wage in the fourth quarter – a level considered unaffordable by common lending standards. Both measures – historical and current affordability – have stayed virtually the same from the third quarter to the fourth quarter of this year after trending consistently against home buyers for almost three years. That has happened as major ownership expenses and wages both are virtually unchanged this quarter. But the two measures are still worse than they were a year ago and far weaker than in 2021. For example, the portion of average wages nationwide required for typical mortgage payments, property taxes and insurance are up three percentage points from a year ago and 12 points from early in 2021, right before home-mortgage rates began shooting up from their lowest levels
in decades. The latest expense-to-wage ratio continues to sit above the 28 percent level preferred by mortgage lenders and marks the highest point since 2007. “The good news is that home affordability has stopped getting tougher around the U.S., at least for the moment. The bad news is that owning a home remains more of a financial stretch than it’s been for many years,” said Rob Barber, CEO for ATTOM. “The annual Fall slowdown in the housing market clearly has helped stem the tide working against potential purchasers. Whether that’s just a temporary thing tied to seasonal market patterns is something we won’t know until next year, especially given recent signs that interest rates are coming down. But for now, there is some break into the growing financial stress for house hunters.” The fourth-quarter trends come at a time of mixed patterns among home prices and home-mortgage interest rates. While average 30-year fixed mortgage rates around the U.S. have grown this quarter from 7.1 to 7.4 percent, the nationwide median home value has slipped almost 3 percent. Those two factors have helped to keep home ownership expenses steady from the third to the fourth quarter, which has helped to keep those costs from becoming even more unaffordable for average workers. Affordability had worsened
almost every prior quarter since early 2021 as wage increases were outpaced by rising interest rates and prices that kept going up amid a decade-long market boom. Another round of price declines during the annual Winter market contraction combined with interest rate declines that have emerged very recently may help turn the affordability picture back around in favor of buyers. The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage payments, property taxes and insurance — on a medianpriced single-family home, assuming a 20 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the U.S. Bureau of Labor Statistics (see full methodology below). Compared to historical levels, median home ownership costs in 572 of the 580 counties analyzed in the fourth quarter of 2023 are less affordable than in the past. That number is virtually the same as in the third quarter of this year and up slightly from the fourth quarter of last year, but more than double the figure from two years ago. Meanwhile, the portion of average local wages consumed by major home-
PLEASE SEE HOME AFFORDABILITY ON PAGE 2
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