Study: South Florida home affordability worsening

FORT LAUDERDALE, Fla. – Nov. 17, 2014 – Buying a home in South Florida became even more unaffordable in 2014 than in 2013 and 2012, according to a new ranking released Friday by Interest.com, a subsidiary of North Palm Beach-based Bankrate.com.
The tri-county Miami metro area was the fifth-least affordable of the 25 largest U.S. metro areas for households at the median income level, an annual study by Interest.com found. The four worse metros were San Francisco, San Diego, New York and Los Angeles.
Home affordability in South Florida worsened because of a widening gap between home prices and income, said Mike Sante, managing editor of Interest.com, in an interview Friday.
The rankings were determined by comparing median home prices from the National Association of Realtors with median household income data from the U.S. Census Bureau, along with median property taxes and homeowner insurance costs.
The Miami metro area earned an "F" affordability grade because a home with a $270,000 median price tag was out of reach of a family earning the $46,946 median income, the website found. Median income increased 0.64 percent while the median home price jumped 7 percent between 2013 and 2014, Sante said. In the 25 metros overall, median income rose 2 percent and median home prices 6 percent.
The degree to which the South Florida median income fell short of the income required for a median-priced home worsened over the past three years. The percent the median income fell short of the income required for a median-priced home – what the study called a "paycheck power rating" – widened from -12.6 percent in 2012 to -24.6 percent in 2013, and to -25.6 percent in 2014.
Among the 25 metros, only Tampa households had a lower median income in 2013 – $45,880, he said. But the median home price was $156,000, making homeownership there more affordable.
Also contributing to South Florida's unaffordability ranking was homeowner insurance costs – highest in the nation and at $1,933 nearly double the national median, he added.
The top-five most affordable U.S. metros were Minneapolis, Atlanta, St. Louis, Detroit and Pittsburgh.
Copyright © 2014 the Sun Sentinel (Fort Lauderdale, Fla.), Donna Gehrke-White. Distributed by MCT Information Services.