In some of the country's priciest neighborhoods, they're relatively subdued
In most of the US, housing markets are exuberant. In some of the country’s priciest neighborhoods, they’re relatively subdued.
Upscale suburbs of Washington, D.C., and wealthy New York enclaves are among the markets with the slowest price appreciation, according to the latest report on US home affordability by real-estate research firm Attom Data Solutions.
House prices were up less than 1% last quarter from a year earlier in Westchester, New York, for example -- and not much more than that in Montgomery County, Maryland, a favorite of wealthy commuters to the capital.
The trend isn’t limited to the east coast, with Chicago’s Cook County posting an increase of 2%. By comparison, almost two-thirds of the counties surveyed saw prices rise more than 10%.
The wealthiest areas may be victims of their past success. The spread of remote work during the pandemic has allowed many employees to opt for living somewhere more affordable.
“Demand today tends to be stronger at the entry and mid-priced tiers of the market than at the higher end,” said Rick Sharga, Attom’s executive vice president of market intelligence.
“Price appreciation tends to rise more quickly in counties with a higher percentage of lower-priced homes available.”
While still pricey, those neighborhoods are at least becoming more affordable compared to historic averages, the data show. That’s a rarity in today’s market, where most counties are seeing home prices rising faster than household incomes.
In more than three-quarters of the 586 counties analyzed by Attom, housing was less affordable than in the past relative to incomes.
With interest rates approaching 5% on a 30-year mortgage, that suggests a squeeze is coming, Sharga said: “More consumers are going to struggle to find a property they can comfortably afford.”