In dozens of the largest markets in the nation, costly housing is linked to a lukewarm job market, according to findings from the National Association of REALTORS® (NAR).
From 2014 to 2018, affordability deteriorated in 81 housing markets, NAR researchers uncovered—and, as of the third quarter of 2019, 34, or approximately 42 percent, are experiencing fewer gains in the job market.
These areas include Boise, Nashville and Tampa, where affordability has significantly weakened, the NAR research shows. In Boise, examining 2014 through the third quarter of 2019, the median price soared 75 percent; however, in the market today, employment growth has slid 0.8 percent. Similarly, in Nashville, home prices rose 53 percent, while employment growth slowed 1.8 percent. In Tampa, home prices rose 58 percent, while employment growth sunk 0.8 percent.
In addition to Boise, Nashville and Tampa, affordability faded in the following regions, despite healthy job markets in the past, according to NAR:
Grand Rapids-Wyoming, Mich.
Affordability Ranking (Q3 2019):
No. 60, down from No. 37 in 2014
Employment Growth (Q3 2019): -1.7%
Louisville/Jefferson County, Ky.-Ind.
Affordability Ranking (Q3 2019): No. 62, down from No. 51 in 2014
Employment Growth (Q3 2019): -0.9%
Indianapolis-Carmel-Anderson, Ind.
Affordability Ranking (Q3 2019): No. 64, down from No. 46 in 2014
Employment Growth (Q3 2019): -0.9%
Chattanooga, Tenn.-Ga.
Affordability Ranking (Q3 2019): No. 70, down from No. 58 in 2014
Employment Growth (Q3 2019): -0.3%
Columbus, Ohio
Affordability Ranking (Q3 2019): No. 80, down from No. 57 in 2014
Employment Growth (Q3 2019): -1%
Atlanta-Sandy Springs-Marietta, Ga.
Affordability Ranking (Q3 2019): No. 91, down from No. 73 in 2014
Employment Growth (Q3 2019): -1.1%
Spartanburg, S.C.
Affordability Ranking (Q3 2019): No. 96, down from No. 83 in 2014
Employment Growth (Q3 2019): -0.4%
Pensacola-Ferry Pass-Brent, Fla.
Affordability Ranking (Q3 2019): No. 111, down from No. 84 in 2014
Employment Growth (Q3 2019): -1.9%
Raleigh, N.C.
Affordability Ranking (Q3 2019): No. 112, down from No. 90 in 2014
Employment Growth (Q3 2019): -0.8%
Deltona-Daytona Beach-Ormond, Fla.
Affordability Ranking (Q3 2019): No. 125, down from No. 94 in 2014
Employment Growth (Q3 2019): -1.5%
Lakeland-Winter Haven, Fla.
Affordability Ranking (Q3 2019): No. 134, down from No. 89 in 2014
Employment Growth (Q3 2019): -1%
Durham-Chapel Hill, N.C.
Affordability Ranking (Q3 2019): No. 137, down from No. 111 in 2014
Employment Growth (Q3 2019): -1.3%
Jacksonville, Fla.
Affordability Ranking (Q3 2019): No. 140, down from No. 117 in 2014
Employment Growth (Q3 2019): -0.8%
Salt Lake City, Utah
Affordability Ranking (Q3 2019): No. 151, down from No. 146 in 2014
Employment Growth (Q3 2019): -0.4%
Las Vegas-Henderson-Paradise, Nev.
Affordability Ranking (Q3 2019): No. 159, down from No. 143 in 2014
Employment Growth (Q3 2019): -1.4%
Yakima, Wash.
Affordability Ranking (Q3 2019): No. 160, down from No. 145 in 2014
Employment Growth (Q3 2019): -0.6%
Eugene, Ore.
Affordability Ranking (Q3 2019): No. 162, down from No. 155 in 2014
Employment Growth (Q3 2019): -1.9%
Salem, Ore.
Affordability Ranking (Q3 2019): No. 163, down from No. 147 in 2014
Employment Growth (Q3 2019): -1.5%
“Job growth has slowed in these areas in part because limited supply is making homes less affordable,” explains Lawrence Yun, chief economist at NAR. “As inventory continues to decline and affordability worsens, workers, businesses and companies are less incentivized to do business in these areas.”
According to Yun, affordability can improve, but only if inventory materializes. If left unaddressed, affordability challenges could curb growth in hot housing markets.
“Even fast-growing markets could be hurt and unable to further expand because of weakening affordability conditions,” says Yun. “We must improve affordability by building more homes in line with local job market growth.”
For more information, please visit www.nar.realtor.
Suzanne De Vita is RISMedia’s senior online editor. RISMedia is the residential real estate industry’s definitive source for news and information. Email Suzanne your real estate news ideas at sdevita@rismedia.com.
