A couple of charts that highlight how disconnected house prices have become from critical end-user, shelter-buyer, employment and income fundamentals in the most populated US cities.
People that look at “national” this and that miss the hair in their couscous.
In short, I don’t care too much about the superb affordability in economically insignificant regions. Rather, the raging unaffordability in the nation’s most economically important.
The two charts are of the same data, just presented differently.
But, the bottom line is the same: People bettter get massive pay raises quickly, or more funny money better enter the housing market now, or prices will revert to what end-user, shelter-buyer fundamentals dictate, which is much lower in most economically critical cities in the nation.
ITEM 1) Household income increase needed to Buy the Median Priced House in Key Cities.
Bottom Line: On a “national” basis the divergence isn’t too bad…6%. But, in the key cities that drive the US economy, Bubble 2.0 has blown large.
ITEM 2) Divergence between Actual Household Income & Income Needed to Buy the Median Priced House.
Best to you,