Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 106 NUMBER 27 ■ MECKTIMES.COM
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TUESDAY, JULY 26, 2022 ■ $2.00
Voluntary employee departures spike 41 percent Page 2
Construction spending dips in May as new residential activity stalls, while nonresidential projects decline for third consecutive month Page 3
CBRE arranges $20.75M sale of adaptive reuse development in South End Page 4
ENNICO: If you own a business, these clauses need to be in your will Page 5
NOVAK: Making ‘Hairstory’: Benia Davis Page 6
Wall Street wavers a day after big market rally Page 7
Rising prices and mortgage rates make homeownership unaffordable across most of the U.S. ATTOM has released its secondquarter 2022 U.S. Home Affordability Report, showing that median-priced single-family homes and condos are less affordable in the second quarter of 2022 compared to historical averages in 97 percent of counties across the nation with enough data to analyze. That was up from 69 percent of counties that were historically less affordable in the second quarter of 2021, to the highest point since 2007, just before the housing market crashed during the Great Recession of the late 2000s. The report also shows that the portion of average wages nationwide required for major home-ownership expenses has risen this quarter to 31.5 percent as the median price of a single-family home has hit a new high of $349,000 and 30-year mortgage rates have shot up above 5 percent. The percentage of average wages consumed by those expenses has risen at the fastest quarterly and annual pace since at least 2000. “Extraordinarily low levels of homes for sale combined with strong demand have caused home prices to soar over the last few years,” said Rick Sharga,
executive vice president of market intelligence at ATTOM. “But homes remained relatively affordable due to historically low mortgage rates and rising wages. With interest rates almost doubling, homebuyers are faced with monthly mortgage payments that are between 40 and 50 percent higher than they were a year ago – payments that many prospective buyers simply can’t afford.” The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage, property taxes and insurance — on a median-priced singlefamily 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 Bureau of Labor Statistics. Compared to historical levels, median home prices in 560 of the 575 counties analyzed in the second quarter of 2022 are less affordable than in the past. The latest number is up from 459 of the same group of counties in the first quarter of
2022, 397 in the second quarter of 2021 and just 251, or less than half, two years ago. That increase has continued as the median national home price has spiked 16 percent over the past year while average annual wages across the country have grown just 6 percent. Major ownership costs on medianpriced single-family homes and condos around the U.S. now require more than 28 percent of the average $67,587 wage in the U.S. - a ceiling considered affordable by common lending standards. The current level of 31.5 percent stands at the highest point since the second quarter of 2007 and is up from 26 percent in the first quarter of 2022 and 23.9 percent in the second quarter of last year. Both increases mark the largest jumps since at least 2000. Affording a home across the nation has gotten significantly tougher in recent months at a time when the U.S. housing market has roared ahead for the 11th straight year but also faces notable headwinds that could slow it down. One major force remains: home prices have
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“South End is one of the hottest submarkets in the United States. The inherent land value underneath horizontal developments like Avenues at Atherton limits future downside risk.” Patrick Gildea CBRE
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