The Tri-Cities in tip-toeing into what’s beginning to look like a softer prime home buying and selling season without its status as an affordable housing market. 

According to the Atlanta Federal Reserve Bank’s Home Ownership Affordability Monitor all Tri-Cities NE TN counties are burdened. That means owners are spending more than 30% of their income for housing.  

That doesn’t mean there’s no affordable housing in the region. There is, but availability is as much of a challange as affordability. What the monitor’s ratings mean is buyers are spending more on housing than recommended. 

The FED’s affordability monitor is a tool that assesses overall market conditions  used by business and civic leaders and investors to keep tabs on the housing market and economies of counties and regions. The most current analysis is for December’s market conditions. 

The Kingsport-Bristol metro area currently has the most affordability rating at 82.3.  But the baseline is 100. Anything below that is unaffordable. 

The Greeneville metro area is the next most affordable market with a 75.3 rating. 

The Johnson City metro area is the least affordable of the local metro areas with a 70.2 rating. 

Here’s the most current FED data on the monthly metrics used for the affordability rating. They are the mortgage payment and percentage of income required for homeownership in the region. The mortgage payment includes principal and interest, taxes, insurance and private mortgage insurance. 

Kingsport-Bristol – $1,528, 36.4%. 

Greeneville – $1,485, 39.8%. 

Johnson City – $1,700, 42.7% 

What’s not included in the index is the 1% to 2% of a home’s purchase price for annual maintenance. 

Since the monthly cost is the deciding factor for most buyers, these numbers move the topic of how can I get the cost down to a higher place on buyer’s pyramid of concerns. 

The biggest cost reduction is a 20% down payment. That eliminates the private mortgage insurance and lower the current mortgage payment by about 17%. Currently, the typical local down payment is in the 7% to 10% range. 

The next largest cost saving is the buyer’s credit score. The higher the score, the better mortgage rate he or she can get. That’s an area where the region and the entire south suffer. It suffers because the south has the lowest average credit scores of all regions in the nation.  

One of the primary reasons affordability has suffered in the region is wage increases have not kept pace with home prices.