Does affordability matter: Why delinquent mortgages more common in ‘most affordable’ states

Why do the states with housing’s highest “affordability” measurements — much-discussed but perhaps dubious economic yardsticks — have more borrowers who can’t make their mortgage payments?

Take California, which usually scores low on the traditional “affordability” ladder. Its homeowners are currently making their house payments with greater frequency.

The state’s home listings are priced at 55 percent of normal “affordability,” according to one housing-cost index from the National Association of Realtors. That ranks next to last nationally.

But just 1.2 percent of Californians who own a home have a delinquent mortgage, the ninth-best payment-making rate among the states, according to loan tracker CoreLogic.

How does such a gap exist? While I’m not trying to diminish the anguish of many frustrated house hunters, tracking housing expenses is a good reflection of the regional economy’s oomph.

I loaded my trusty spreadsheet with various economic and housing markers — plus the recent ranking of state rankings I compiled — to ponder how housing “affordability” translated to other measurements of life. But you don’t need a trusty spreadsheet to know you don’t buy — or keep — a home without a steady paycheck.

So when California bosses were adding employees at a 1 percent annual pace in November, 20th best among the states, that created more competition for those seeking homeownership.

These seemingly conflicting California trends — being able to “afford” the supposedly “unaffordable” house payments — were commonly found across the nation when I compared the “most-affordable” states for homebuying — the top third, ranked by the Realtor metric — vs. the “least affordable” in the bottom third.

Look at mortgage delinquency trends from CoreLogic for the third quarter: An average 4.1 percent of owners in the “most affordable” states were late payers vs. 3.5 percent for the “least affordable” states. Again, jobs help explain this gap. Data from the Bureau of Labor Statistics shows 1.2 percent yearly growth in employment for the “most affordable” states vs. 2.2 percent for the least.

Now to be fair…