Median home prices of single-family homes and condos in the second quarter were less affordable than historical averages in 61 percent of counties analyzed by ATTOM, according to its second-quarter 2021 U.S. Home Affordability Report. That’s up from 48 percent in the second quarter of 2020, to the highest point in two years.
Compared to historical levels, median home prices in 347 of the 569 counties analyzed were less affordable than past averages. That is up from 275 of the same group of counties in the second quarter of 2020, a backslide that developed amid a 22 percent spike in the median national home price year-over-year to a record of $305,000.
“Average workers across the country can still manage the major expenses of owning a home, based on lender standards. But things have gone in the wrong direction this quarter in a majority of markets as the national housing market boom roars onward,” ATTOM Chief Product Officer Todd Teta said in a release. “While super-low mortgage rates have certainly helped in a big way, prices have simply shot up too much to maintain historic affordability levels. The near future of affordability remains very uncertain, as it has throughout the pandemic. For the moment, the situation is a mix of positive and negative trends.”
Major ownership costs on the typical home accounted for 25.2 percent of the average national wage of $63,986 in the second quarter, up from 22.7 percent in the first quarter and 22.2 percent in the second quarter of last year, to the highest point since the third quarter of 2008, according to ATTOM. Lenders prefer homeowners spend within 28 percent of their earnings on mortgage payments, home insurance and property taxes.
Counties requiring the smallest portion of average local wages to be spent on major homeownership costs were Schuylkill County (outside Allentown), Pa., (5.5 percent of annualized weekly wages needed to buy a home); Bibb County (Macon), Ga., (8 percent); Cambria County (outside Pittsburgh), Pa., (8.2 percent); Macon County (Decatur), Ill., (9.1 percent) and Peoria County, Ill. (10.4 percent).
Counties that required the greatest percentage of wages were Kings County (Brooklyn), N.Y. (100.8 percent); Marin County (outside San Francisco), Calif., (81.4 percent); Santa Cruz County, Calif., (76.2 percent); Queens County, N.Y., (68.7 percent) and Monterey County (outside San Francisco), Calif. (65.9 percent).
Among the 43 counties with a population of at least 1 million, ATTOM reported the biggest year-over-year gains in median home prices during the second quarter were in San Bernardino County, Calif., (up 25 percent); Mecklenburg County (Charlotte), N.C., (up 24 percent); Maricopa County (Phoenix), Ariz., (up 21 percent); Hillsborough County (Tampa), Fla., (up 20 percent) and Middlesex County (outside Boston), Mass., (up 20 percent).
Counties with least 1 million in population with the smallest year-over-year median home price increases (or price declines) were New York County (Manhattan), N.Y. (down 21 percent); Wayne County (Detroit), Mich., (down 2 percent); Bronx County, N.Y., (up 2 percent); Kings County (Brooklyn), N.Y., (up 3 percent) and Santa Clara County (San Jose), Calif., (up 4 percent).
Annual wages of more than $75,000 were needed to afford the typical home in 18 percent of the markets ATTOM analyzed. The highest annual wages needed to afford the typical home are all on the coasts, led by San Mateo County (outside San Francisco), Calif., ($246,090); Marin County (outside San Francisco), Calif., ($245,914); San Francisco County, Calif., ($237,588); New York County (Manhattan), N.Y. ($212,246), and Santa Clara County (San Jose), Calif., ($220,850). The lowest are in Schuylkill County (outside Allentown), Penn., ($9,055); Cambria County (outside Pittsburgh), Penn., ($12,688); Bibb County (Macon), Ga., ($13,415); Robeson County (outside Fayetteville), N.C., ($16,951) and Chautauqua County, (outside Buffalo), N.Y., ($17,977).