12 markets nearing a housing bubble this summer

Stronger wage and job growth, atop reductions in mortgage rates, have been welcome signs for consumers looking to buy a house. But affordability hurdles are still prominent and outweigh consumer optimism related to favorable conditions like lower rates.

While in certain cities homebuyers are gaining more purchasing power, in others, the gap between the home-price appreciation rate and that of wages is widening. In these markets, where property value gains are outpacing wage increases, housing bubble dangers loom.

House prices are outpacing wages in about 40% of markets, and 61% were less affordable than the historic average, according to Attom Data Solutions. In 353 of the 480 counties analyzed by Attom, homes were not affordable to average wage earners in the second quarter.

Here's a look at 12 cities most in danger of a housing bubble this summer. The analysis, based on Attom data, evaluates counties with a minimum population of 100,000, at least 100 quarterly home sales and a median sales price above the national rate of $255,000. Counties are ranked by the gap between the annual increase in home prices and wages. Ties were broken by the lowest Affordability Index Value. The Attom Data Home Affordability Index measures average wages to buy a median-priced home on a recent and historical basis.

Median sales price: $257,811 (9%)
Annual wages: $41,964 (3%)
Gap between growth in home prices and wages: 6 percentage points
Affordability Index: 80

Median sales price: $312,500 (10%)
Annual wages: $42,445 (3%)
Gap between growth in home prices and wages: 6 percentage points
Affordability Index: 94