12 cities where clients are losing homebuying power

Even though income growth, declining mortgage rates and edged-down home prices have boosted affordability nationwide, some clients may face difficulties when house hunting.

Average household wages increased 3% in April from the same period a year earlier, according to First American Financial's Real House Price Index. At the same time, housing prices decreased 0.04% year-over-year and 0.9% from the month prior, data shows. Overall, consumer purchasing power rose 5.2% from March 2018 and 1.5% from February.

"What began as a modest shift toward a buyers’ market in six cities last month has expanded into a national shift in affordability," says Mark Fleming, chief economist for First American. "The shift is a departure from the long-term trend in the Real House Price Index, which had been steadily increasing throughout the rising mortgage rate environment that began in 2017 and continued until late 2018. Rising mortgage rates caused consumer house buying power to decline at the same time as tight supply pushed house prices up rapidly."

Yet not all cities are experiencing this shift. Some still have a gap between home prices and affordability. From secondary markets along the East Coast to the heart of the Midwest, here's a look at cities where consumers are losing ground in home buying power.

Data from the First American Real House Price Index that follows measures annual home price changes, taking local wages and mortgage rates into account "to better reflect consumers' purchasing power and capture the true cost of housing." Cities are ranked by the largest year-over-year changes in RHPI, as of March.

Columbus, Ohio
Year-over-year RHPI: 5.87%
RHPI: 60.29
Median sale price: $179,575
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Providence, Rhode Island
Year-over-year RHPI: 5.52%
RHPI: 94.90
Median sale price: $258,488
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Atlanta, Georgia
Year-over-year RHPI: 3.69%
RHPI: 72.08
Median sale price: $196,914
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Millennium Gate at Atlantic Station in Midtown Atlanta, Georgia, USA.
Cincinnati, Ohio
Year-over-year RHPI: 3.63%
RHPI: 64.61
Median sale price: $144,375
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Milwaukee, Wisconsin
Year-over-year RHPI: 3.48%
RHPI: 93.67
Median sale price: $175,038
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Las Vegas, Nevada
Year-over-year RHPI: 3.35%
RHPI: 83.17
Median sale price: $268,825
Las Vegas Landing Page Picture
Orlando, Florida
Year-over-year RHPI: 3.24 %
RHPI: 94.06
Median sale price: $218,750
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"Partners," a statue of Walt Disney and Mickey Mouse, sits in front of Cinderalla Castle at Magic Kingdom, part of the Walt Disney World theme park and resort in Lake Buena Vista, Florida, U.S., on Monday, Aug. 31, 2009. Walt Disney Co. said it agreed to buy Marvel Entertainment Inc. for about $4 billion in a stock and cash transaction, gaining comic book characters including Iron Man, Spider-Man and Captain America. Photographer: Matt Stroshane/Bloomberg
Phoenix, Arizona
Year-over-year RHPI: 3.05%
RHPI: 88.72
Median sale price: $251,038
NMN032019-phoenix.jpg
City of Phoenix Panorama. Phoenix, Arizona, United States.
Raleigh, North Carolina
Year-over-year RHPI: 2.93%
RHPI: 81.48
Median sale price: $242,125
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Cleveland, Ohio
Year-over-year RHPI2.77%
RHPI: 49.83
Median sale price: $131,750
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CLEVELAND - SEPTEMBER 16: Rock and Roll Hall of Fame and Cleveland, Ohio skyline from the harbor walkway
Virginia Beach, Virginia
Year-over-year RHPI: 2.32%
RHPI: 90.65
Median sale price: $206,375
NMN031119-virginia-beach.jpg
The boardwalk and highrise hotels in Virginia Beach, Virginia.
Minneapolis, Minnesota
Year-over-year RHPI: 2.26%
RHPI: 89.94
Median sale price: $245,950
NMN053018-minneapolis.jpg
This article originally appeared in National Mortgage News.
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