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Wages Fail to Keep Up With Home Prices

Home price increases have started to plateau, but with wages remaining stagnant, cash-strapped shoppers are still feeling put out.

According to Trulia, asking prices on listed homes rose 1.2 percent month-to-month in June, the highest monthly increase in more than a year. The increase was the same both with and without foreclosures.

Quarter-over-quarter, Q2 asking prices came up 2.6 percent, while annual gains came to 8.1 percent. Both increases paled in comparison to the respective 3.1 percent and 9.5 percent improvements recorded a year ago.

Despite the national slowdown, "price increases continue to be widespread, with 97 of 100 metros posting year-over-year price gains—the most since the recovery began," said Trulia chief economist Jed Kolko.

Unfortunately, consumer incomes have failed to keep pace. Out of the top 10 markets for annual price gains in June—most of which were in the South or Midwest—Kolko found that wages per worker rose less than 1 percent last year in all but one.

Nationally, asking prices rose faster year-over-year than wages per worker in 95 of the 100 largest metros.

Home rental prices have also outpaced wage growth in all of the 25 largest markets, according to Trulia.

Nationally, rents were up 5.5 percent year-on-year in June, with some of the country's already more expensive markets—like Miami, Oakland, San Francisco, and San Diego—seeing gains of more than 10 percent.

"The median rent for a 2-bedroom unit costs more than 40 percent of the average local wage in these markets," Kolko said.

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