Zillow’s research into affordability begins with an analysis of how large a share of consumers’ income is currently devoted to mortgage payments, and compares that to how much consumers were paying toward housing costs in the pre-bubble period from 1985 to 2000. It also predicts how much consumers will be devoting to mortgage payments as interest rates rise. Areas where consumers will be paying more of their incomes to afford a median home are at risk of becoming unaffordable, and may see home values drop in coming months and years.
To download the comprehensive research brief, visit www.zillow.com/research/reports
Highlights (Q2 2015):