Median-priced single-family homes were less affordable in the third quarter compared with historical averages in 75 percent of counties analyzed, according to ATTOM’s third-quarter 2021 U.S. Home Affordability Report. That’s up from 56 percent of counties a year ago, to the highest point in 13 years, as home prices have increased faster than wages in much of the country.
Compared with historical levels, median home prices in 430 of the 572 counties analyzed in the third quarter were less affordable than past averages. The latest number is up from 317 year-over-year, a downturn that developed as the median national home price rose 18 percent to a record high of $315,500.
While major ownership costs on median-priced homes remain within the financial means of average workers, the percentage of counties where affordability is worse than historical averages is at the highest point since the third quarter of 2008.
“The typical median-priced home around the U.S. remains affordable to workers earning an average wage, despite prices that keep going through the roof. Super-low interests and rising pay continue to be the main reasons why,” ATTOM Chief Product Officer Todd Teta said in a release. “But affordability keeps inching in the wrong direction as the housing market boom keeps roaring ahead. That’s pushing average workers closer and closer to the point where lenders might be reluctant to give them a mortgage. With much still uncertain about how the pandemic and many other forces could still affect the economy, affordability remains a crucial measure of market stability that could easily keep going in the same direction or swing back the other way.”
The largest counties where major homeownership expenses on typical homes are affordable to average local wage earners in the third quarter include Cook County (Chicago), Ill.; Harris County (Houston), Texas; Dallas County, Texas; Bexar County (San Antonio), Texas, and Wayne County (Detroit), Mich., according to ATTOM’s analysis.
The largest counties where major expenses on median-priced homes are unaffordable for average local workers include Los Angeles County, Calif.; Maricopa County (Phoenix), Ariz.; San Diego County, Calif.; Orange County, (outside Los Angeles), Calif., and Miami-Dade County, Fla.
Among the 43 counties with a population of at least 1 million, the biggest year-over-year gains in median prices during the third quarter of 2021 are in Middlesex County (outside Boston), Ma. (up 32 percent); Maricopa County (Phoenix), Ariz. (up 24 percent); Travis County (Austin), Texas (up 23 percent); Hillsborough County (Tampa), Fla. (up 22 percent) and Clark County (Las Vegas), Nev. (up 22 percent).
Counties with a population of at least 1 million that have the smallest year-over-year median-price increases in the third quarter New York County (Manhattan), N.Y. (up less than 1 percent); Fairfax County, Va. (outside Washington, D.C.) (up 5 percent); Santa Clara County (San Jose), Calif. (up 6 percent); Suffolk County, (eastern Long Island) N.Y. (up 7 percent) and Dallas County, Texas (up 7 percent).
The top highest annual wages required to afford the typical home are all on the east or west coasts, led by New York County (Manhattan), N.Y. ($247,479); San Mateo County (outside San Francisco), Calif. ($246,824); San Francisco County, Calif. ($241,125); Marin County (outside San Francisco), Calif. ($232,106), and Santa Clara County (San Jose), Calif. ($223,718).
The lowest annual wages required to afford a median-priced home in the third quarter are in Schuylkill County, (outside Allentown) Pa. ($15,834); Fayette County, (outside Pittsburgh) Pa. ($16,497); Cambria County, (outside Pittsburgh) Pa. ($16,895); Robeson County, (outside Fayetteville) N.C. ($19,358), and Bibb County (Macon), Ga. ($19,471).