Homeownership remains affordable for the average person in most of Louisiana’s metro areas — except in Orleans, Livingston and Tangipahoa parishes, a regular study of housing prices shows.
The U.S. Home Affordability Report for the second quarter of the year, compiled by California-based ATTOM Data Solutions, shows that in East Baton Rouge, Jefferson and Lafayette parishes, housing prices are more affordable than the historic average. Ascension Parish remained at its historic average.
Shelley Simmons, a member of the Greater Baton Rouge Association of Realtors’ board of directors, said the numbers show that metro Baton Rouge is still an affordable metro area. The supply of homes continues to rise at about the same pace as home price increases. As of May, the most recent month the association has sales figures for, there are 4,343 homes for sale, up from 4,209 in May 2018, a 3.2% bump. The median sale price for the first five months of the year was $201,970, up 3% over the $196,000 figure through May 2018.
“I don’t think affordability is an issue,” said Simmons, office manager of C.J. Brown Livingston. “I think there’s a lack of awareness in certain age groups that they can afford a house that remains a barrier to entry.”
Simmons said the affordability numbers for Livingston and Tangipahoa are skewed because so many people live in those parishes but work in Baton Rouge or on the north shore, where wages are higher. “It speaks volumes how many people commute in,” she said, pointing to the regular traffic congestion along Interstate 12 during the early evening.
Despite falling mortgage rates and rising wages, the report found that during the second quarter median home prices were not affordable for average wage earners in 353 out of the 480 counties and parishes surveyed. The results are based on the amount of income needed to make monthly house payments, which include mortgage, property taxes and insurance. A 3% down payment and a maximum debt-to-income ratio of 28% were assumed for the results.
In East Baton Rouge, the report said an average of $47,606 was needed to afford a house during the quarter. In comparison, annualized weekly wages came in just above $53,000.
Similar numbers were reported in Jefferson, where the average cost of homeownership in the quarter was $47,357. Annualized weekly wages were nearly $49,700. Lafayette had an average homeownership cost of $45,621, with annualized weekly wages at $47,203. In Ascension, annualized weekly wages were $55,432, while the average cost of homeownership was $54,332.
In Orleans Parish, the annual income needed to buy a home was $65,383. In contrast, annualized weekly wages were $52,416. It takes nearly 35% of annual wages to buy the average home in the parish.
In Livingston, it takes 34.3% of annual wages to buy a home. Wages were $37,375 and the average homeownership cost was $45,826. Tangipahoa had average wages of $35,815 and homeownership costs of $38,954.