Story at a glance
- Median homebuyer incomes in Boise, Idaho, for example, rose by 24 percent over two years to $98,000.
- But housing prices increased 53 percent during the same period.
- Nationally, homebuyer wages jumped by nearly 7 percent, yet earnings were outpaced by skyrocketing housing costs that soared by 29 percent.
“Pandemic boomtowns” experienced outsized income growth and soaring home prices from 2019 to 2021 as remote work enabled high wage earners to relocate from coastal cities into smaller markets, according to new research.
Median homebuyer incomes in Boise, Idaho, for example, rose by 24 percent over two years to $98,000. But housing prices increased 53 percent during the same period, research from real estate brokerage Redfin shows.
Austin, Texas, another popular relocation spot early in the pandemic, saw median homebuyer income surge by 19 percent from 2019 to 2021 while housing prices grew by 48 percent.
Three Florida cities — Cape Coral, North Port and West Palm Beach — saw the largest increases in both homebuyer median income and housing prices.
“For white-collar workers earning high salaries, remote work is a huge financial boon. It enables them to move from a tech center like San Francisco to a more affordable part of the country like Boise or Salt Lake City, get more home for their money and save some for a rainy day,” Redfin Senior Economist Sheharyar Bokhari, said in a media release.
“It can have the opposite effect on locals in those destinations–especially renters–who are watching from the sidelines as home prices skyrocket while their income stays mostly the same.”
Nationally, homebuyer wages jumped by nearly 7 percent, yet earnings were outpaced by skyrocketing housing costs that soared by 29 percent.
Median home prices across the U.S. in June increased by 10.9 percent from the year before at nearly $428,000.
America is changing faster than ever! Add Changing America to your Facebook or Twitter feed to stay on top of the news.
Redfin’s analysis shows boomtown housing markets are beginning to cool, driven by rising mortgage rates and unsustainable pricing. Thirty-year fixed mortgage rates increased year over year by 2.5 percentage points in June.
Yet cooling markets in towns like Austin and Cape Coral are unlikely to lead to housing crashes, the analysis noted.
“People are still moving in from California and they still have enough money to buy nice homes in desirable neighborhoods, sometimes with all cash,” said Austin Redfin agent Gabriel Recio.
“But the days of homes selling for 25% over asking price with multiple offers are over. Buyers are no longer as eager now that mortgage rates are up and there’s buzz in the air about the slowing housing market. Local buyers–and even buyers coming from out of town–now have a chance to take their time and buy a home at asking price or even under asking price.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Changing america
