The national median home price rose 18 percent, to $278,000, in the first quarter of 2021, according to
ATTOM Data Solutions’ 2021 U.S. Home Affordability Report. But increasing wages and dropping mortgage rates helped keep the costs affordable for average wage earners, the report stated.
“The past year certainly has been an odd one for the U.S. housing market,” ATTOM Data Solutions Chief Product Officer Todd Teta said in a release. “Home prices surged at a remarkable pace even as the virus pandemic damaged the U.S. economy, which dropped historical affordability levels. But average workers untarnished by the pandemic were still able to afford the typical home because wages and rock-bottom interest rates worked to their favor in a big way.”
Median home prices in 287 of the 552 counties ATTOM analyzed in the first quarter were more affordable than past averages. That was down from 349 counties in the first quarter of 2020. Major expenses on a median-priced home made up 23.7 percent of the average wage across the country in the first quarter, up from 22 percent in first quarter of 2020 and 19.7 percent five years ago. However, it was still within the 28 percent standard lenders prefer for how much should be spent on those expenses, according to the report.
Among the counties in the report, 59 percent had major homeownership expenses in the first quarter that were affordable for average wage earners. The largest of those counties were Cook County, Ill. (Chicago); Harris County, Texas (Houston); Dallas County, Texas; Bexar County, Texas (San Antonio); and Wayne County, Mich. (Detroit.)
The largest counties where major expenses on median-priced homes were unaffordable for average earners in the first quarter were Los Angeles County, Calif.; Maricopa County, Ariz., (Phoenix); San Diego County, Calif.; Orange County, Calif., (outside Los Angeles); and Miami-Dade County, Fla.
“Much remains uncertain about the housing market in 2021,” Teta said. “A lot will depend on how well the broader U.S. economy recovers from the pandemic and whether there are still many more buyers looking to escape congested neighborhoods most prone to the virus, pushing prices even higher. But for now, our data shows that average workers are able to manage the costs associated with rising values.”