A new study out from the National Association of Realtors found that during the 10 year period of 2010-2020, nearly 980,000 middle-income households became homeowners. Within that same timeframe, total housing wealth for this income group surged by $2.1 trillion.
The Housing Wealth Gains for the Rising Middle-Class Markets report looks at the distribution of housing wealth across income groups and in 917 metropolitan or micropolitan areas. Some 529 of 917, or 58 percent of metropolitan and micropolitan areas gained middle-income homeowners during that decade span.
The top 10 rising middle-income housing markets, largely centered in the south, were as follows:
- Phoenix-Mesa-Scottsdale
- Austin-Round Rock
- Nashville-Davidson-Murfreesboro-Franklin
- Dallas-Fort Worth-Arlington
- Houston-The Woodlands-Sugarland
- Atlanta-Sandy Springs-Roswell
- Orlando-Kissimmee-Sanford
- Portland-Vancouver-Hillsboro
- Seattle-Tacoma-Bellevue
- Tampa-St. Petersburg-Clearwater
“Owning a home continues to be a proven method for building long-term wealth,” said Lawrence Yun, NAR chief economist. “Home values generally grow over time, so homeowners begin the wealth-building process as soon as they make a down payment and move to pay down their mortgage.”
Nationally, a homeowner who purchased a typical single-family existing home 10 years ago at the median sales price of $162,600 is likely to have accumulated $229,400 in housing wealth, according to NAR. Of this wealth gain, 86 percent can be attributed to price appreciation.
However, it’s not all gains for all homeowners. According to the report, including locally in Los Angeles/Long Beach/Anaheim. Nevertheless, some markets saw housing wealth rise as home prices climbed, such as the Los Angeles metro area which hit $164.5 billion.
“These escalating home values were no doubt beneficial to homeowners and home sellers,” said Yun. “However, as these markets flourish, middle-income wage earners face increasingly difficult affordability issues and are regrettably being priced out of the home-buying process.”