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Home Price Plateau Possible in Areas Where Wages Can’t Keep Up

While a study released on Thursday by
RealtyTrac shows a huge discrepancy between the growth in home prices and
increasing wages, it appears that housing in most of the country remains
affordable.  The California company
looked at wage growth and home price appreciation over recent two year periods and
found that the former is far from keeping up with the latter.

In its
analysis RealtyTrac used data on median home prices taken from deeds registered
in 184 metropolitan statistical areas in the two years that ended in December
2014 and Bureau of Labor Statistics wage data from the second quarter of 2012,
when home prices hit bottom and began to recover, and the second quarter of
2014.  It adopted the six month time lag
between the beginning of the two two-year time periods based on the hypothesis that a change
in average wages would take at least six months to impact home prices. 

…(read more)

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