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A recent report<\/a> from real estate data firm Redfin says that San Francisco<\/a> housing costs have returned to “normal” levels, but unfortunately, normal doesn’t mean affordable.<\/p>\n That’s because Redfin’s baseline for “normal” was the U.S. housing market in July 2018. Although its report doesn’t include home prices, historical data<\/a> from Zillow’s home value index shows that the average home in San Francisco was worth roughly $1.3 million during that period.<\/p>\n Don’t Miss:<\/p>\n By that point, a surge of Big Tech wealth had been driving San Francisco real estate prices into the stratosphere for well over a decade. But even if price spikes have slowed and the market is stabilizing, buying a house in San Francisco remains out of reach for most middle-class homebuyers. That’s especially true when you account for the fact that interest rates are significantly higher today than they were seven years ago.<\/p>\n Redfin notes that pinpointing a single moment in the housing market that could be called “normal” is difficult. However, it landed on July 2018 as its baseline based on a number of key reasons.<\/p>\n Interest rates were around 4%, and data from that period showed home prices rising at a manageable rate in most of the U.S. There was also a relatively even split between buyers and sellers.<\/p>\n Trending: From Moxy Hotels to $12B in Real Estate \u2014 The Firm Behind NYC’s Trendiest Properties Is Letting Individual Investors In.<\/a><\/p>\n Finally, the nationwide median monthly mortgage payment-to-income ratio was about 30%, a widely accepted benchmark for housing affordability in the U.S., meaning that a typical homebuyer would need to spend 30% of their income on their mortgage each month.<\/p>\n The mortgage payment-to-income ratio in San Francisco was more than 74% in July 2018, according to Redfin, but seven years later, a slowdown in home prices and rising income have dropped that figure down to 67%.<\/p>\n That’s an improvement, but certainly not big enough to help San Francisco shed its status as one of America’s most out-of-reach housing markets. There’s also a chance that the recent surge in Big Tech’s AI profits<\/a> could turbocharge real estate there and send prices skyrocketing again.<\/p>\n See Also: Backed by $300M+ in Assets and Microsoft’s Climate Fund, Farmland LP Opens Vital Farmland III to Accredited Investors<\/a><\/p>\n That might be the last thing prospective homebuyers in San Francisco want to hear. Redfin acknowledged the difficulties they nmay face in similar metropolitan markets by noting that a return to “normal” may not result in a return to affordability.<\/p>\n That reality may be forcing many Bay Area residents to consider moving someplace cheaper. Fortunately for them, the national picture looks a little brighter in the near future.<\/p>\n Redfin’s report predicts that U.S. housing costs will have gotten back to “normal” by 2030, which means a return to that affordable national monthly mortgage payment-to-income ratio of 30%. That prediction is based on the assumption that incomes will continue to rise at an annual rate of 3.9% and that mortgage rates will fall to 5.5% by then.<\/p>\n Read Next: Deloitte’s #1 Fastest-Growing Software Company Lets Users Earn Money Just by Scrolling \u2014 Accredited Investors Can Still Get In at $0.50\/Share.<\/a><\/p>\n Image: Shutterstock<\/p>\n This article A Study Says San Francisco’s Housing Costs Have Returned To ‘Normal’ Levels \u2013 So Why Is It Still So Unaffordable?<\/a> originally appeared on Benzinga.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. A…\n","protected":false},"author":2,"featured_media":23047,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[18127,101,103,102,104,106,105],"class_list":{"0":"post-23046","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-francisco","8":"tag-redfin","9":"tag-san-francisco","10":"tag-san-francisco-headlines","11":"tag-san-francisco-news","12":"tag-sf","13":"tag-sf-headlines","14":"tag-sf-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/23046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=23046"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/23046\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/23047"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=23046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=23046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=23046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}