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How The Pace Of Home Value Growth Compares With The Pace Of US Wage Growth

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How The Pace Of Home Value Growth Compares With The Pace Of US Wage Growth
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The United States’ median national home value popped 6.5 percent year-over-year in October to $203,400, according to a recent Zillow Group, Inc. (NASDAQ: Z) report.

Unfortunately for the American worker, income didn’t grow as sharply.

Average hourly wages increased from $25.90 last October to $26.53 this October, with stable, 34.4-hour work weeks.

This means the average weekly wage increased 2.4 percent against a median housing value increase of 6.5 percent.

And the incident isn’t isolated. While year-over-year wage gains have been recently muted, the median housing value has seen 6-percent-or-higher hikes for 15 consecutive months.

The disproportionate growth justifies and compounds concerns recently expressed by Federal National Mortgage Association (OTC: FNMA) CEO Timothy Mayopoulos, who lamented the inaccessibility of homeownership that's partly driven by a scarcity in starter homes.

“Since the onset of the housing collapse, more than 1 million starter homes have been lost,” Mayopoulos said at the Detroit Economic Club. “Between 2012 and 2015, the most affordable one-third of homes rose 38 percent in price and the inventory dropped by 39 percent. Inventory for more expensive homes has gone up.”

The disparity, then, only aggravates the already strained market. At the same time, it heightens challenges among aspiring homeowners who are forced to resort to rentals, as Mayopoulos noted rent hikes currently outpace wage hikes.

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Posted-In: fannie mae Timothy Mayopoulos ZillowTop Stories Economics General Real Estate Best of Benzinga

 

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