Median home prices are unaffordable for average wage earners in 66 percent of the U.S. counties analyzed, according to ATTOM Data Solutions’ U.S. Home Affordability Report.
That affordability figure was 70.4 percent in the fourth quarter of 2019 and 69.8 percent one year ago, ATTOM found. Owning a median-priced home in the first quarter of 2020 ($252,500) consumed 31.1 percent of the national average wage, down from 31.4 percent in the fourth quarter of 2019 and 31.6 percent in the first quarter of 2019, to the lowest percentage since the fourth quarter of 2017
“Home affordability has inched ahead this year across the United States as buying a house or a condo gets closer and closer to the level where the average wage earner can swing the deal within standard lending guidelines,” ATTOM Chief Product Officer Todd Teta said in a release. “While the national median price still remains a bit out of reach for the average wage earner, the affordability gap has narrowed to the smallest point in more than two years.
“It seems bizarre that median home prices have risen 8 percent over the past 12 years while average wages grew by less than half that amount,” Teta said. “But falling interest rates continue making up the difference, dropping monthly home ownership payments in a majority of the country.”
The most-populous counties where a median-priced home in the first quarter are not affordable for average wage earners are Los Angeles County, California; Maricopa County (Phoenix), Ariz.; San Diego County, Calif.; Orange County, Calif. (in the Los Angeles metropolitan statistical area) and Miami-Dade County, Fla.
The report said the median-priced home in 34 percent of counties analyzed were affordable for average wage earners, including in Cook County (Chicago) Ill.; Harris County (Houston), Texas; Dallas County, Texas; Wayne County (Detroit), Mich.; and Philadelphia County, Pa.
“All that may change in a huge way over the next few months as the impact of the coronavirus hits the housing market,” Teta said. “We are entering a period of great uncertainty. But in the initial months of the year, the picture has appeared to continue to brighten for home seekers.”