National Mortgage News reports that these 12 U.S. housing markets are in danger of hitting a housing bubble this summer.
While in certain cities homebuyers are gaining more purchasing power, in others, the gap between the home-price appreciation rate and that of wages is widening. In these markets, where property value gains are outpacing wage increases, housing bubble dangers loom.
House prices are outpacing wages in about 40% of markets, and 61% were less affordable than the historic average, according to Attom Data Solutions. In 353 of the 480 counties analyzed by Attom, homes were not affordable to average wage earners in the second quarter.
According to the analysis, the risk of a housing bubble was highest in Hilo, Hawaii, where the gap between growth in home prices and wages was 10 percentage points. Following Hilo were Providence-Warwick, R.I.-Mass. (10 percentage points), Charlottesville, Va. (9 points), Longview, Wash. (9 points), and Mount Vernon-Anacortes, Wash. (9 points).
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