Carmen Queral, PAC, MBA - Beverly Hills Realtor
REALTORĀ®
"Everything is Possible in Real Estate"
(818) 321-5056
Weekly and/or sometimes Monthly Economic/Real Estate Updates are posted on this page in reverse chronological order.  

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October 12, 2018

Economic and Real Estate Update for the Week Ending October 12, 2018

Stocks have largest weekly loss since March - Stock markets ended higher on Friday after 6 straight losing sessions to end the week with the largest weekly loss in 7 months. Investors feared rising interest rates, trade war concerns with China, and rising international pressures after the International Monetary Fund reduced its growth expectations for next year. Friday a report showed that inflation grew less than expected, which calmed investors. Next week third quarter earnings are going to begin to be reported. Analysts expect those to be up over 20% from last year. The Dow Jones Industrial Average closed the week at 25,339.99,  down from 26,447.05 last week. It is up 2.5% year to date.  The S&P 500 closed the week at 2,767.13, down from 2,885.57 last week.  It’s up 3.5% year to date. The NASDAQ closed the week at 7,496.89, down from 7,788.45 last week.   It’s up 8.6% year to date. 

 Treasury Bond Yields lower this week -  Bond yields dropped this week after reaching multi year highs last week. The 10-Year Treasury Bond closed the week yielding 3.15%, down from 3.23% last week. The 30-Year Treasury Bond Yield ended the week at 3.32%, down from 3.40% last week. We watch treasury bond yields because mortgage rates follow bond yields. 

 Mortgage rates at highest level in 8 years  – The October 11, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-Year Fixed Mortgage Rate Average was 4.90%, up sharply from 4.71%  last week. The 15-Year Fixed was 4.29%, up from 4.15% last week. The 5-year ARM was 4.07%, up from 4.01% last week. Bond yields dropped later in the week. Next week’s mortgage rates will be slightly lower. 

 Inflation tame in September - The consumer price index (CPI) rose just 0.1% for the month in September, and 2.3% from one year ago. That was below expectations of 0.2%, and 2.4%. 


Housing/Real Estate Market

Revised Permit Numbers for August Up 4%. The Census Bureau reports that building permits were up in total (4% month-over-month), up slightly  for single family (1%), but up strongly for 3-4 unit buildings (+44%) and 5+ unit buildings (+16%). Permit approvals in the west matched the national figures with an increase of +1% for single-family permits, and +21% for multi-family.

Home Price Gains Slowing - Price Growth Slows for Second Month: The S&P CoreLogic Case-Shiller Index shows that home prices rose by 6.0% in July, down from 6.2% in June and 6.4% in May. While we still have robust price growth led by limited supply and strong demand, prices could begin to shift if new construction begins to materially grow. Vegas (13.7%), Seattle (12.1%), and San Francisco (10.8%) had the highest year-over-year growth, but both the 10-city and 20-city indices rose by similar proportions to the overall series.

National Pending Home Sales Down 1.8% in August 8th Straight Month of Decline: The National Association of REALTORS®(NAR) reports that pending home sales nationwide fell slightly in August, culminating in the 8th straight month (annualized) of declining pending sales. The index fell to 104.2 from 106.1 in August and is down 2.3% year-over-year. Pending sales in the Western region plummeted 5.9% and is 11.3% below last year. Lack of available supply, high prices, and declining benefits of tax reform remains largely behind the slowdown.

Black Knight reports that 3.52% of mortgages were delinquent in August, down 5.7% over the past two months. 0.54% of mortgages were in the foreclosure process. Foreclosures are 12 percent below last year’s levels, down 185,000 properties year-over-year.

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 Economic and Real Estate Update for the Week Ending 9/28/18:

Stocks drop slightly in the final week of September - Stock markets fell slightly this week after hitting record highs last week. Escalating trade tensions with China and another interest rate hike by the Federal Reserve left investors a little more cautious this week. The Dow Jones Industrial Average closed the week at 26,458.31, down from 26,743.50 last week. It is up 7% year to date.  The S&P 500 closed the week at 2,913.98, down from 2,929.67 last week.  It’s up 9% year to date. The NASDAQ closed the week at 8,046.35, up from 7,986.96 last week.   It’s up 16% year to date. 

Treasury Bond Yields slightly lower -  The 10-Year Treasury Bond closed the week yielding 3.05%, down slightly from 3.07% last week. The 30-Year Treasury Bond Yield ended the week at 3.19%, almost unchanged from 3.20% last week. We watch treasury bond yields because mortgage rates follow bond yields. 

Mortgage rates higher this week - The September 27 2018 Freddie Mac Primary Mortgage Survey reported that the 30-Year Fixed mortgage rate average was 4.72%, up from 4.65%  last week. The 15-Year Fixed was 4.16%, up  from 4.11% last week. The 5-Year ARM was 3.97%, up from 3.93% last week. 

Consumer Confidence at highest level hits 18 year high in September - The U.S. Consumer Confidence Index hit its highest level since 2000 this week, according to data from the Conference Board’s September survey. 

New home sales rebound in August - The Commerce Department reported that sales of new homes increased 3.6% in August from July on a seasonally adjusted annualized rate. Year-over-year, the number of new homes sold in August increased 12.7% from August 2017. The median price paid for a new home increased 1.9% from one year ago. 


Real Estate Update for the Week Ending 5/18/18:

California existing home sales and prices increase in April - The California Association of Realtors reported that total existing home sales totaled 416,790 in April, on a seasonally adjusted annualized rate, which was 2.2% higher than last April's sales rate. Prices continued to increase (so if you're thinking of buying, the sooner the better!). Statewide the median price paid for a home was $584,460, up 8.6% from  April 2107. Local markets posted varying gains. In Los Angeles County, the median price paid for a home was up 10.1% from last April.  The median price in Ventura County increased just 4.7% year over year. The Orange County median price gained 5.5%. Inventory levels rose 1.9% in April marking the first rise in three years. The unsold inventory index in April had a 3.2 month supply of homes, up from a 2.9 month supply in  March, but still lower than a 3.3 month supply in April 2017. 

 


Economic Update for the Week Ending 4/20/18:


Even though a bit unnerving in the last few weeks, stock markets were up for second straight week this past week- Stocks ended the week higher again as first quarter corporate profits began to be reported. Profits were stronger than expected and stocks rose. Profit season was a welcome relief to investors as it seems to distract from almost two months of uncertainty caused by trade and tariff fears and political turmoil. While fears of a trade war still remain, as well as the prospects of higher interest rates, investors remain bullish. They feel that the tax cuts and increased spending will keep the economy strong through 2018 and 2019. The Dow Jones Industrial Average closed the week at 24,462.91, up from last week’s close of 24,306.14. It is down 1% year to date. The S&P 500 closed the week at 2,670.14, up from 2,656.39 last week.  It's down 0.1% year to date. The NASDAQ closed at 7,146.13up from 7,106.55 last week. It is up 3.5% year to date.

California home sales up slightly - Home prices show year over year double digit increases in Los Angeles - The California Association of Realtors reported that Existing, single-family home sales totaled 423,990 in March on a seasonally adjusted annualized rate. That represented a 1.6% increase from last March’s sales pace.

Treasury Bond yields sharply higher this past week - The 10-Year Treasury Bond closed the week yielding 2.96%, up from 2.82% last week. The 30-Year Treasury Bond yield ended the week at 3.14%, up from 3.03% last week. 

Mortgage Rates higher this past week - The April 19, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-Year Fixed mortgage rate average was 4.47%, slightly above  last week’s 4.44%. The 15-Year Fixed was 3.94%, up from 3.87% last week. The 5-Year ARM was 3.67%, up from 3.61%  last week. Rates were higher at the end of the week, so next week’s rates will be higher. 

The median price of a home in March in California was $565,830, up 8.9% from March 2017. The median price in Los Angeles County rose 13.6% year over year from last March. It was the fourth straight month of double digit year over year increases. Ventura County showed the smallest year over year increase in the state with the median price growing just 1.8%. Inventory levels statewide remain at historic lows. 

The unsold inventory index dropped to a 2.9 month supply in March, down from a 3 month supply in March 2017. This historic low inventory is pushing prices higher. 


Economic and Real Estate Update for the Week Ending 3/2/18:

Stock markets drop sharply in the last week of February and first two days of March - Stock markets dropped in four out of five sessions in volatile trading this past week. The week began with new Federal Reserve Chairman, Jerome Powell's testimony to congress. In his first congressional update he stated that he would raise short term interest rates at a faster pace than his predecessor. He testified that the economy was strong, and inflation was tame, but stated that historical low interest rates were not needed to stimulate an already robust economy.

Investors sold stocks in fears that higher interest rates will increase borrowing costs and cut into corporate profits. Later in the week, President Trump announced that he planned to place tariffs on steel and aluminum imports in an effort to help U.S. metal companies. That sparked another sell off as many U.S. companies purchase imported steel and aluminum. Their costs will be increased, which will increase the cost of their products, which include: cars, trucks, soda cans, building materials, etc.

Another fear is that although the U.S. has a huge trade deficit, we still are among the biggest exporters of goods in the world. It is feared that other countries may retaliate and place tariffs on U.S. goods. That would hurt many industries. The
Dow Jones Industrial Average closed the week at 24,538.06, down sharply from last week’s close of 25,309.99.  It is down 0.7% year to date. The S&P 500 closed the week at 2,691.25, down from 2,747.30 last week.  It's up 0.7% year to date. The NASDAQ closed at 7,257.87, down from 7,337.39 last week. It is up 4.7% year to date. 

 Treasury Bond Yields -  The 10-Year Treasury Bond closed the week yielding 2.86%, down slightly from 2.88% last week. The 30-Year Treasury Bond yield ended the week at 3.14%, down slightly from 3.16% last week. We watch bond rates because mortgage rates follow bond rates. 

Mortgage Rates slightly higher this past week - The March 1, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-Year Fixed mortgage rate average was 4.43%, up slightly from last week’s 4.40%. The 15-Year Fixed was 3.90%, up from 3.85% last week. The 5-Year ARM was 3.62%, down from 3.65% last week.

U.S. Pending Home Sales Index drops 4.7% - The National Association of Realtors announced that its pending home sale index for January, which is based on the number of contracts signed for existing home purchases, dropped 4.7% from December. It was the lowest number of pending sales since October 2014. Year-over-year existing home sales were 3.8% lower than last January. Extremely low housing inventory was blamed for the drop in sales. The number of active listings was down 9.5% in January from the number of listings in January 2017. The number of existing homes listed for sale in the U.S. was the lowest ever recorded in January.

Southern California median price increased 11.4% in January - CoreLogic/DataQuick announced that the median price paid for a home in the 6 county region increased 11.4% in January from one year ago. The median price was $507,000 in January. It was the highest year-over-year increase in the median price in 44 months. 

The February Jobs report will be released next Friday. Wage gains will be the most pertinent part of the report. Interest rates rose after January's report showed that average hourly wages rose at the fastest rate since 2010 in January. That caused investors to fear higher inflation was on the way. The February report will show if January's wage increase was an outlier, or the start of a trend after years of stagnant wages. 

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Economic and Real Estate Update for the Week Ending 1/26/18:

Stocks having record January - Stocks rallied to new highs again this week, as a number of companies reported higher than expected earnings. As well as posting solid fourth quarter earnings they provided optimistic guidance regarding their outlook for 2018. Companies  included the tax savings under the recently passed tax reform, a stronger domestic and world economy, and increased consumer spending as factors for their higher outlooks.  The Dow Jones Industrial Average closed the week at 26,616.71, up from last week’s close of 26.071.72. It's up 7.7% year to date.  The S&P 500 closed the week at 2,872.77, up from 2,810.30 last week. It is up 7.5% year to date. The NASDAQ closed at 7,507.77, up from 7,336.38 last week. It is up  8.7% year to date.

Treasury Bond Yields -   The 10 year treasury bond closed the week yielding 2.66% up just slightly from 2.64% last week. The 30-year treasury bond yield ended the week at 2.91%, unchanged from 2.91% last week. We watch bond rates because mortgage rates follow bond rates. 

Mortgage  rates higher this week - Although inflation has remained tame, rates have risen in recent weeks. Fixed rates follow corresponding bonds. For example the 30-year fixed follows 30-year bond yields. Usually, long term bonds follow inflation, but bonds also attract investors looking for lower risk.  With stocks soaring many investors have moved money from low risk, low return bonds to stocks. Lower demand for bonds have driven yields up. If stocks begin to drop, and inflation remains tame, I'd expect rates to settle in a little lower. Rates are still near historic lows. The January 25, 2018 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 4.15% up from last week’s 4.04%. The 15 year fixed was 3.62%, up from 3.49% last week. The 5-year ARM was 3.52%, up from 3.46% last week. 

2017 Gross Domestic Product - The Commerce Department reported its first estimate of the nation's fourth quarter GDP growth at 2.6%. Experts had forecasted growth at 3%, so this initial estimate was disappointing. The initial estimate is often revised. For the year, the nation's $17 trillion economy recovered from a slow start in the first quarter where GDP growth was just 1.4%; it grew to 3.1% in the second quarter, 3.2% in the third quarter, and ended the year at 2.6% in an initial estimate. Those quarterly rates are annualized, so if the initial estimate is not revised much the growth rate would be about 2.6% for the entire year.

Consumer spending higher in fourth quarter —Consumer spending, which is the biggest contributor to the economy,  grew at a 3.8% pace, its fastest pace in more than a year. Growth was partly driven by the strongest holiday shopping season in several years, according to data from MasterCard SpendingPulse. Business spending on large equipment also added to growth.

California existing  home sales, and prices increase in 2017 - -The California Association of Realtors reported that existing single-family home sales totaled 423,760 in 2017, up 1.4% from 2016 when 417,720 closed escrows were reported.  The median (not average) price paid for a home in California was $549,560, up 7.6% for 2017. Housing inventory, which had been at historically low levels, dropped even further. The unsold inventory index revealed that there was just a 2.5 month supply of homes in the market in December, the lowest monthly reading in 13 years The number of homes for sale in 2017 was 12% below that of 2016. Los Angeles County saw a higher increase in prices than the state as a whole, due to tighter inventory levels.   The median price in Los Angeles County increased 10.6% in 2017, while the number of sales dropped 7.3%. 

U.S. existing home sales highest in 11 years — The National Association of Realtors reported that the number of existing homes sold in 2017 increased 1.1% from 2016 to the highest level in 11 years. The median price was $246,800, a 5.8% increase from last December. Total housing inventory was 11.4% lower in December, compared to December 2016. There was a 3.2 month supply in December, down from a 3.6 month supply last December. It marked the lowest inventory level since NAR began tracking monthly inventory supply. Existing home sales include all sales of residential homes, condominiums, town-homes and co-ops reported to member associations throughout the country. 

2017 New home sales highest in 10 years  - The Commerce Department reported that although the number of new homes sold in the U.S. dropped in December, new home sales increased 8.3% in 2017. The number of new homes sold hit a 10 year high in 2017. 

 

Economic and CA Real Estate Update for the Week Ending 11/17/17:


https://www.linkedin.com/pulse/economic-ca-real-estate-update-week-ending-november-carmen-a-/



Economic and CA Real Estate Update for the Week Ending 3/3/17:

 

Stocks had another week of gains, and mortgage rates lower but end the week higher. Details:

https://www.linkedin.com/pulse/economic-real-estate-update-week-ending-march-3-2017-carmen-a-


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2016 Year End Economic and Real Estate Update and My Predictions for 2017:

 It was a great year for Real Estate, and it would have been much better had it not been for the limited inventory.  Read more about it here: 

https://www.linkedin.com/pulse/2016-year-end-economic-real-estate-update-my-2017-carmen-a-

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Economic and Real Estate Update for Week Ending July 22, 2016

Stocks up for the fourth straight week - Sparked by second quarter quarterly profits coming in above expectations, continued low interest rates, and better than expected economic reports,... Read More

Economic and Real Estate Update for Week Ending 6/24/16

Stocks suffer their worst day in 10 months following British vote to leave European Union - Stocks declined worldwide on Friday following results of British vote to leave the European Union... Read More


Economic Update For The Week Ending June 17, 2016

Stocks lower this week - Stock markets have dropped in the last 6 sessions.  Investor's fears are over next Thursday's British referendum to leave the European Union.  It is unknown what impact it will have if the referendum passes, but many investors feel it will harm the European economy and thus hurt corporate profits.  Some believe that if the British break away from the European Union others will follow.   

The Dow Jones Industrial Average closed the week at 17,675.16, down from 17,865.34 last Friday. The S&P 500 closed the week at  2,071.22, down from 2,096.07 last week. The NASDAQ closed the week at 4,800.34, down from last week's close of 4,895.55.

Bond yields remain near 3-year low – The 10-Year U.S. Treasury bond yield closed the week at 1.62%, down slightly from 1.64% last Friday.  The 30-Year U.S. Treasury bond closed at 2.44%, also down from 2.44% last week.  Mortgage rates follow bond rates so we watch bond rates carefully.

Mortgage rates at 3-year low ! - The Freddie Mac Primary Mortgage Survey released on June 16,  2016 showed that average mortgage rates from lenders surveyed, for the most popular mortgage products, were as follows: The 30-Year Fixed rate average was 3.54%. The 15-Year Fixed average rate was 2.81%  The 5/1 ARM average rate was 2.74%. Bond yields dropped at the end of the week so rates could be even lower next week. 

California's unemployment rate dips to 5.2% -  The Employment Development Department reported that California employers added 15,200 net new jobs in May. While the number of new jobs added was below what analysts expected, the unemployment rate fell from 5.3% in April to 5.2% in May.  The unemployment rate in May 2015 was 6.4%, so being at 5.2% is a 1.2% drop year over year! 

Federal Reserve leaves rates unchanged in June - Amid worries of slowing job growth, The Federal Open Market Committee declined to raise its interest rate target from 0.5% at this week's two day meeting. Fed chairperson, Janet Yellen, signaled late last year that there could be as many as 6 increases in 2016.  As the labor market growth has slowed and economic growth is no longer at last year's levels, Fed officials are signaling that there may only be one or two increases in 2016. 

California existing home sales and prices up in May - The California Association of Realtors reported that existing home sales in California totaled 410,190 in May on a seasonally adjusted annual rate.  That is up 0.6% from April and down 3.2% from last May.  Tight inventory has impacted the number of sales, as there was just a 3.4 month supply of homes on the market in May, down from 3.5 months in April. A 6-7 month supply is considered normal. 

The median price paid for a single family home in California rose to $518,760 in May from $509,590 in April. 


Economic and Real Estate Update for the week ending June 10, 2016

Stocks hit 2016 highs on Wednesday and lost all the gains at the end the week !Stock market indexes hit their highest levels in 2016 on Wednesday, only to fall Thursday and Friday to end the week pretty much unchanged.  The week started off with comments from Fed chairperson, Janet Yellen, which led investors to believe that an interest rate hike soon would no longer occur, given last Friday's weak jobs growth report.   

This was good news to investors, as higher interest rates increase borrowing costs which reduce profit. On Thursday, the Labor Department reported that jobless claims dropped by 4,000 for the week, suggesting that the labor market was stronger than last week's report implied. On Wednesday, oil hit the highest price per barrel since last July, toping $51 a barrel after bottoming out in February at $27 a barrel.  This helped stocks, as rising oil prices helps energy stocks and economies in oil producing areas where low prices have led to cuts in production. The number of new rigs increased for the second straight week.  

Unfortunately, on Thursday and Friday oil prices dropped back down to about $49 a barrel. Stocks retreated, losing all the gains for the week.  The Dow Jones Industrial Average closed the week at 17,865.34, up from 17,807.06 last Friday. The S&P 500 closed the week at  2,096.07, unchanged from 2,099.13 last week. The NASDAQ closed the week at 4,895.55, down from last week's close of 4,942.52.

Bond yields drop – The 10-Year U.S. Treasury bond yield closed the week at 1.64%, down significantly from 1.85% on May 31. The 30-Year U.S. Treasury bond closed at 2.44%, also down from 2.63% at the end of May. Mortgage rates follow bond rates so we watch bond rates carefully.

Mortgage rates drop to 3-year lowThe Freddie Mac Primary Mortgage Survey released on June 9,  2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-Year Fixed rate average was 3.60%. The 15-Year Fixed average rate was 2.87%.  The 5/1 ARM average rate was 2.82%. Bond yields dropped at the end of the week so rates could be even lower next week.


Economic and Real Estate Update for the week ending May 20, 2016

Stocks were mixed this past week - Stocks climbed Monday, only to be pulled back after The Federal Reserve released minutes from the April meeting suggesting a possible interest rate hike as early as their June meeting.  The Dow Jones Industrial Average closed the week at 17,500.94, down from 17,535.32 last week. The S&P 500 closed the week at 2,052.32, up slightly from 2,046.41 last week. The NASDAQ closed Friday at 4,769.56, up from 4,717.68 last week. 

Bond yields rose after Fed minutes suggested a rate hike possible in June - The 10-Year U.S. Treasury bond  closed Friday yielding 1.85%, up sharply from 1.71% last week. The 30-Year U.S. Treasury bond closed Friday yielding 2.63%, also up from 2.55% last week. Mortgage rates follow bond yields so we watch bonds carefully. 

Mortgage rates inch up from 3-year low—The Freddie Mac Primary Mortgage Survey released on May 19, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-Year Fixed rate average was 3.55% The 15-Year Fixed average rate was 2.81%. The 5/1 ARM average rate was 2.80%.

California state-wide median price breaks $500,000 - The California Association of Realtors reported that the median price of a home in California rose to $509,100 in April. That represents a 5.3% month-over-month increase from March. 

California homes re-sales are fewer due to tight inventory - The California Association of Realtors also reported that the number of homes sold in April dropped 2.6% from its annualized level in March. Year-over-year the number of sales declined 5.4% from April 2015. The Unsold Inventory Index dropped again to a 3.5 month supply in April. A normal market is a 6.1 month supply, so inventory levels are around 60% of normal, according to CAR. This tight inventory is pushing prices higher and sales lower as buyers are again finding it tough to find homes to buy. 


                                 WDCH


Economic and Real Estate Update for the week ending May 13, 2016

Stocks drop again this week - Stocks dropped again this week as a new round of first quarter corporate earnings reports showed consumers pulled back sharply on purchases. Retail sales were particularly weak, as companies revised their outlooks downward for the remainder of the year. Late Friday the Commerce Department released April retail sales figures, which showed that sales rebounded. It will be interesting to see how this affects the opening of the market on Monday. The Dow Jones Industrial Average closed the week at 17,535.32, down from 17,740.63 last week. The S&P 500 closed the week at 2,046.61, down from 2,057.41 last week. The NASDAQ closed Friday at 4,717.68, down from 4,736.16 last week. 

Bond yields lower again this week - The 10-Year U.S. Treasury bond  closed Friday yielding 1.71%, down from 1.79% last week. The 30-Year U.S. Treasury bond closed Friday yielding 2.55%, also lower than 2.62% last week. Mortgage rates follow bond yields so we watch bonds carefully. 

Mortgage rates drop to 3 year low - The Freddie Mac Primary Mortgage Survey released on May 12, 2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-Year-Fixed rate average was 3.57%. The 15-Year-Fixed average rate was 2.81%. The 5/1 ARM average rate was 2.78%.

Retail sales surged in April - The Commerce Department reported that U.S. retail sales recorded their biggest increase in a year as consumers stepped up purchases of automobiles and other goods in April.  This report suggested that the economy may be gaining momentum after a disappointing first quarter. Retail sales surged 1.3% in April, its largest gain since March 2015.  Coming just days after Macy's and Nordstrom's reported poor first quarter sales, this report suggests that fear of that consumer spending slowing sharply may have been over-exaggerated. 

Homes more affordable in the first quarter - The California Association of Realtors reported that housing affordability in the state improved in the first quarter.  Strong wage growth, lower interest rates, and leveling home prices pushes housing affordability higher. According to C.A.R., 34% of California households could afford to purchase a $465,280 median-priced home. The income required to purchase a median priced home was $92,571. This was up from the fourth quarter of 2015 when only 30% of households could afford to purchase a median-priced home. Condos and town-homes were even more affordable, with 41% of households able to afford a condo or town-home. The income needed to purchase the median-priced condo or town-home was  $77,575.


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