Nationally, asking prices increased 9.5 percent year-over-year in May, but in the ten least affordable metros, asking prices spiked 16.3 percent during the same time period.
Trulia also found out of the 100 largest metros, 98 saw asking prices increase over the last year.
Among the least affordable markets, seven were in California.
Honolulu was found to be the least affordable metro, where 74 percent of monthly household income is used to pay a mortgage. In San Francisco, households spend 55 percent of their monthly wages on their mortgage.
In the 10 least affordable markets, households spent at least a third of their income towards their mortgage.
The calculation assumed a 3.8 percent interest rate on a home that is 1800 square feet.
Jed Kolko, Trulia’s chief economist, gave two reasons for why the gap in affordability matters.
For one, it leads to a migration out of less affordable markets.
“[M]ore people in expensive markets like California will look to relocate to cheaper markets like Texas when the time comes to buy,” he said.
For the full article, see trulia-asking-prices-accelerate-in-least-affordable-housing-markets-2013-06-07
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