Chicago housing affordability remained strong throughout the boom – Illinois News

In Chicago, the boom was flatter, lifting home prices 9.6% above historical affordability.

Of the 25 largest US metropolitan areas, Chicago is the second closest to long-term affordability levels, the report found. Only Baltimore comes closer to the historical norm. The housing boom has lifted home prices in Baltimore 3.7% above trend.

Zillow’s affordability measure examines what percentage of the high-income population earns enough money to afford a typical metro area home.

Chicago benefits from a relatively high median household income — $78,831, which is about 9.6% higher than the national level — and relatively low housing costs. A typical Chicago-area home costs about $311,700, or 13% less than the typical US home value, according to Zillow.

During the real estate boom, Chicago held tight to affordability compared to other cities, in large part because house prices rose here but didn’t inflate like a bubble like they did in many other parts of the country.

Among the 25 largest cities, Nashville, Tennessee ranks furthest above its historical affordability, at 39.4% more expensive than it used to be. Five other metro areas are more than 35% above their long-term trend. You are Dallas-Ft. Value; Las Vegas; Charlotte, NC; Tampa, Fla. and Jacksonville, Fla.

According to Nicole Bachaud, senior economist at Zillow, property values ​​are unlikely to fall enough to return to historical affordability. Zillow forecasts property values ​​to remain flat for about the next year. “The next few years appear to be a major affordability challenge for homebuyers nationwide,” Bachaud said in prepared comments on the data.

Factors that could improve affordability include rising incomes, falling house prices and interest rates, and widespread construction of new homes to fill the country’s housing gap.


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via rk2’s favorite articles on Inoreader

October 20, 2022 at 05:14PM

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