Triangle median income is 70% of what it takes to buy a median-priced home, TMLS says

A family in the Triangle living on the median household income earns just 70% of what they need to comfortably buy a median-priced house today, according to new figures from Triangle Multiple Listing Services (TMLS).

“Currently, the results indicate that no area is affordable in any part our 12-county study area,” said Matt Fowler, executive director of TMLS, a real estate listings platform based in Cary. “We have a dramatic undersupply of properties that real people can buy.”

This month marks the first time TMLS has released an affordability index for all 12 counties in the greater Triangle since launching its monthly market report years ago. The aim, they say, is to get down to the “nitty gritty” of just how far the region’s housing affordability has slipped after two-plus years of plunging inventory, soaring prices and climbing mortgage rates, now at 6.7%.

While there are some signs of cooling after historic peaks last June, the Triangle’s median sale price was still $395,000 — up 6.7% from a year ago. Income and wages, however, are not keeping up.

In Wake County, the median income of a family now only reaches 60% of what they would need to afford a median-price house at prevailing mortgage rates, TMLS found.

In Durham County, the median income is only 70% of the income needed for a median-price house. In Orange County, it’s around 66%. Chatham and Wake Forest counties, meanwhile, show the household median income is less than half of what home buyers would need to comfortably buy a house.

TMLS employs third-party vendor, MarketStats, to calculate its index. It analyzes county-level median income data from the U.S. Department of Housing and Urban Development. It is then weighted against the median home price and mortgage rates from FreddieMac.

Looking ahead, Fowler says he doesn’t expect home prices to budge much. The undersupply of housing provides a “floor” for prices. In particular, houses priced under $300,000 — what he considers a “starter home” in the Triangle — are scarce.

“The supply of listings at the lower end of the price spectrum is not keeping up with demand, anywhere,” he said.

Another big driver is the region’s influx of new residents, said MLS Triangle director of communications Thomas Babb. That’s driving competition and preventing home prices from dropping.

“People with California-sized pockets are coming to an area that’s statistically half the income level,” he said. “That’s making competition harder for locals or natives that don’t have quite as much income.”

Joyce Paton, 60, is feeling the squeeze firsthand. The optician currently pays $1,770 a month to rent a two-bedroom at Wakefield Glen Apartments in North Raleigh. She’s looking to buy a home in Angier, a 55-minute commute northwest to Durham, where she works.

Her price point: $250,000. But she’s not having much luck. “It’s hard to find a house within reason that’s not broken down and doesn’t need major repairs,” she said. “I can’t afford to do that either.”

Experts warn North Carolina could soon be facing a crisis of housing affordability.

As the state remains one of the nation’s the fastest-growing states, construction of new housing is failing to meet the influx, argues Michael Tanner, a fellow at the libertarian Cato Institute and author of the Cato Institute report “Keeping North Carolina’s Housing Affordable,” released last month.

He notes the state needs 900,000 additional homes over the next decade to meet the demands of its growing population. “Trends suggest that the state won’t come close,” he said.