(Source: AZCentral): Catherine Reagor – Metro Phoenix steadily rising home values do come with a price.
While most homeowners are euphoric to have equity again, each uptick in prices leaves more buyers struggling to afford a home of their own.
During the past year, the typical Valley home price has climbed more than 9 percent.
The increase was enough to knock the Phoenix area off a top 10 list of the most affordable big U.S. cities to buy homes.
Metro Phoenix dropped to No. 17 on national mortgage firm HSH.com’s second quarter ranking of the most affordable areas.
A year ago, the Valley ranked no. 8 on the list. This is the first time the area hasn’t ranked in the top 10 since 2014, the inaugural year for the list.
Income, income, income
HSH’s affordability analysis looks at what income is needed to afford a median-priced home in big U.S. cities.
To afford a typical Valley home priced at $247,300 now, a buyer with a 20 percent downpayment would need to make $48,654 a year.
Metro Phoenix’s median household income was $55,547 in 2015, according to the most recent data from the U.S. Census.
The number for 2016 will be out later this month.
For metro Phoenix to bounce back as one of the 10 most affordable cities to buy a home, the area’s median income will need to climb as much as home prices.
Knocked down the list
Atlanta, San Antonio, Tampa and Orlando also dropped off the recent top 10 list for the most affordable cities to buy homes.
Those are other cities with strong housing markets and population growth like Phoenix.
Pittsburgh, Cleveland and Indianapolis are the nation’s top three (in that order) most affordable places to buy. All of those cities have ranked in the top 10 for several years.
Houses are much more affordable in those older, Rust Belt cities, and home prices climb slower.
Maybe it’s not such a blow for Phoenix to fall off a list dominated by cities with slower growth.
Just as long as we don’t fall to the bottom of the list like San Francisco, Los Angeles and San Diego.