With the increase in home prices outstripping wage and income gains in Chattanooga, the region is becoming less affordable than in the past and that could be hurting job growth in metro Chattanooga, according to a new study by the National Association of Realtors.
Chattanooga ranked fourth among 174 major U.S. cities in the decline of households that can comfortably afford to buy a median price home in the market. Although home prices in Chattanooga remain nearly 30% below the U.S. average, housing prices have risen faster in Chattanooga than the U.S. as a whole since 2014 and have risen far more than wages.
As a result, home affordability has dropped in the local market and the available inventory of homes available for sale shrunk at the end of last year to only 2.6 months, or less than a fourth of the average selling time for houses a decade ago.
Chattanooga home sales
Single-family home sales by Chattanooga Realtors in 2019 rose to the highest annual rate in history.1999: 4,7932000: 4,7742001: 5,0882002: 5,4042003: 6,1642004: 7,1222005: 7,7432006: 8,1762007: 7,3152008: 6,1732009: 5,6782010: 5,8102011: 5,6132012: 6,5962013: 7,1532014: 7,3232015: 8,7172016: 9,6722017: 9,8262018: 10,0342019: 10,714Source: Greater Chattanooga Realtors
The NAR analysis found that in markets like Chattanooga where home affordability has worsened more than the U.S. as a whole, the pace of job growth appears to be flattening out more than in more affordable markets.