Monday
December 22, 2014

Housing’s Latest Threat: The Gap Between Rich, Poor

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Housing’s Latest Threat: The Gap Between Rich, Poor

The gap between America’s richest and poorest metro areas is at an all-time high, and it’s prompting an uneven housing recovery, the Financial Times reports.

For example, the income disparity between the tenth-priciest region and the 90th by home prices in 2013 hit its widest margin since recordkeeping began in 1969, according to data from the U.S. Commerce and Labor Department.

The Job Effect

More Jobs, Income Growth Needed to Give Recovery Jolt

Cities Expecting Job Growth in 2014

Taking the Long View on Recovery

The recovering job market has fluctuated greatly over the country, with some regions seeing big growth and others barely a trickle.

"Housing markets are playing out at very different speeds, partly as a result of the lack of geographical breadth in the labor market,” says Mark Palim, a Fannie Mae economist. “Certain sectors of the economy are performing better than others, propelling some housing markets over others.”

For example, in Austin, Texas, where technology jobs are driving demand, the housing market is soaring. On the other hand, in Akron, Ohio, employment through its manufacturing base remains sluggish and home purchases have remained at modest levels.

Jobs and income growth are playing an outsized role in the performance of local housing markets, even more so as mortgage interest rates rise and home price rises affect affordability, says Palim.

Source: “Record Income Gap Fuels U.S. Housing Weakness,” Financial Times (Aug. 12, 2014)