KIRO Radio's Tom Kelly digs deep into the Puget Sound real estate market
Real Estate

Lack of jobs, income jolt homebuyer affordability

Jobs and income growth are key "to turn in another gold-medal performance for the housing recovery" in 2014, according to Frank Nothaft, Freddie Mac's chief economist.

"Rising home prices and interest rates along with little to no income growth has resulted in a substantial erosion of homebuyer affordability over the past year," Nothaft said. "If rates continue their upward trend, it will be difficult for many families to purchase a home without seeing some income growth."

An improving economy is helping to bolster the housing market but lackluster labor reports in January are resulting in a slow start for the residential sector, according to Freddie Mac's latest Economic and Housing Market Outlook.
Freddie predicts unemployment to stay at 6.6 percent in the second quarter and fall to 6.4 percent by the end of this year.

Despite the Federal Reserve beginning to taper its $85 billion per month bond-buying stimulus program in January, 10-year Treasury yields and fixed mortgage rates mostly eased over the month, falling about 0.3 percentage points between January and early February.

"It appears mortgage rates may have given the market a reprieve for a month or so and provided some borrowers another chance at refinancing, especially those folks that may be holding older mortgages," Nothaft said.

Top Stories
ATTENTION COMMENTERS: We've changed our comments, but want to keep you in the conversation.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.
comments powered by Disqus
Listen to the show
Hear Real Estate Today on KIRO Radio
Join Tom Kelly every Sunday at 9am on KIRO Radio to talk Puget Sound real estate.

Sign up for breaking news e-mail alerts from
In the community
Do you know an exceptional citizen who has impacted and inspired others?
KIRO Radio and WSECU would like to recognize six oustanding citizens this year. Nominate them to be recognized and to receive a $2,000 charitable grant.