Rising home prices outpace wage increases in Mobile

Mobile County

New study looks at wage data and home prices over the last five years

FILE – In this July 4, 2020 photo, a sold sign hangs in front of a house in Brighton, N.Y. More Americans signed contracts to buy homes in July, a sign that the hot housing market should continue into the fall season. (AP Photo/Ted Shaffrey)

Interest rates are low but it hasn’t gotten any easier for many Mobilains to purchase a home, according to a new study by Construction Coverage.

Over the last five years, wages in Mobile have gone up 11.8-percent while home prices have risen 19.2 percent during the same period.

Research from the Economic Policy Institute shows that while wages for high-income workers grew steadily since the 1980s, middle- and low-income workers have actually seen their wages stagnate or even decline after adjusting for inflation.

Meantime, housing demand, driven by a growing economy and more millennial homebuyers, has risen while supply has failed to keep pace. Data from the U.S. Census Bureau indicates that new home construction has still not rebounded to pre-Great Recession levels. The long-term increased demand for housing paired with a concurrent diminishing supply has contributed to the nation’s housing affordability crisis.

Researchers analyzed data from Zillow and the U.S. Bureau of Labor Statistics. For each metro, the percentage change in home price between 2014 and 2019 was divided by the percentage change in median wage during the same time period.

Here is a summary of the data:

Mobile
Increase in home prices relative to income: 1.6X
5-year percentage change in home prices: 19.2%
5-year percentage change in wages: 11.8%
Median home price (2019): $123,736
Median annual wage (2019): $35,710

Alabama
Increase in home prices relative to income: 1.5X
5-year percentage change in home prices: 19.0%
5-year percentage change in wages: 12.8%
Median home price (2019): $139,957
Median annual wage (2019): $34,800

U.S.A.
Increase in home prices relative to income: 2.6X
5-year percentage change in home prices: 30.7%
5-year percentage change in wages: 12.0%
Median home price (2019): $242,058
Median annual wage (2019): $39,810

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