John Burns Real Estate Consulting looked at how current housing affordability in the top U.S. housing market compares to the prices of the past.
We all know that New York is more expensive than Texas and that relocating home buyers can get more for their money in the South. However, for local housing industry executives, what matters is how expensive each market is in comparison to its own history. Our Burns Affordability Index™ (a 10-point scale where 0 is the most affordable time in a market’s history and 10 is the least affordable time) measures the ratio of total housing costs (mortgage payment, property taxes, etc.) to incomes over time in each market. By this measure, Houston and Denver appear more out of line than other markets.
Of course, affordability is a draw to Houston and Denver if you are coming from very expensive markets like California, but the value gap between California and these markets has narrowed recently. Only time will tell if this gap has narrowed permanently.