Which Time Zones Have the Most Affordable Housing?
|Every year when some states “spring forward” like they did this weekend, the national conversation always turns to “daylight savings time” and if we should keep that system in place. But we thought it would be a good opportunity to focus on housing affordability in the different time zones.
What is “Affordability”? Well Nerd Wallet calculated it by comparing median household incomes and median home prices, assuming a 20% down payment. A place with high incomes and low home prices is more affordable for buying a home than an area with low incomes and high home prices.
Each quarter, NerdWallet calculates the home affordability for 178 metropolitan areas, matching the list of metros for which the National Association of Realtors publishes median home prices. This quarter, NerdWallet sorted the metro areas by time zone, slicing the contiguous United States roughly into fourths. There were big differences in affordability of homes among time zones.
No surprise as cities in the Pacific time zone have the least-affordable housing in the country, and the Central time zone has the most-affordable housing.
Source: Nerd Wallet, WCPO Cincinnati
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 4.00 MBS) gained +44 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move lower compared to the previous week.
Overview: We had very strong economic data with ISM Services (2/3 of our economy) hitting their 4th best level in 20 years and Average Hourly Earnings beating out estimates with a YOY gain of 3.4%. But concern over Brexit, China Trade and very weak economic data out of Europe, pushed MBS prices higher which inversely pushes mortgage rates lower.
Jobs, Jobs, Jobs: We got the Big Jobs report on Friday and while the headline Non-Farm Payroll missed, overall it was very strong.
ISM Services: Wow, the February ISM Non Manufacturing had the 4th best reading in 20 years and handily beat market expectations (59.7 vs est of 57.3). This is more important than last week’s ISM Manufacturing release as this represents more than 2/3 of our economy.
Taking it the House: January Building Permits were higher than expected (1.345M vs est of 1.289M) and New Housing Starts also beat out estimates (1.230M vs est of 1.197M).
Central Bank Palooza: The European Central Bank kept their key interest rate at 0.00% but came out with a much more dovish approach. ECB President Mario Draghi went full-dove and admitted that its forecasts were way off and revised 2019 growth expectations “substantially” lower (from 1.7% to +1.1%) and slashed all inflation forecasts with 2019 GDP at 1.1% vs their original expectations of 1.7% and inflation of 1.2% vs original “guestimates” of 1.6%.
|What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.