The U.S. median home price in the fourth quarter was at the least affordable level since the third quarter of 2008, according to ATTOM Data Solutions’ Q4 2018 U.S. Home Affordability Report.
ATTOM said its Q4 2018 home affordability index was 91, down from 94 in the previous quarter and 106 one year ago to the lowest level since the index was 87 in the third quarter of 2008.
“While poor home affordability continues to cloud the U.S. housing market, there are silver linings in the local data as home price appreciation falls more in line with wage growth,” ATTOM Data Solutions Senior Vice President Daren Blomquist said in a release. “Affordability improved from the previous quarter in more than half of all local markets, and one in five local markets saw annual wage growth outpace annual home price appreciation, including high-priced areas such as San Diego, Brooklyn and Seattle.”
According to the index, 76 percent of the counties analyzed posted a fourth-quarter affordability index below 100, meaning homes were less affordable than the long-term affordability averages for the county.
ATTOM found that home affordability improved in 272 of the 469 counties analyzed in the report (58 percent), including Cook County (Chicago), Ill.; Harris County (Houston), Texas; San Diego County, Calif.; Orange County, Calif.; and Miami-Dade County, Fla.
Home affordability worsened in 197 of the 469 counties, including Los Angeles County, Calif.; Maricopa County (Phoenix), Ariz.; Riverside County, Calif.; San Bernardino County, Calif.; and Clark County (Las Vegas), Nev.
The index found a median-priced home in the fourth quarter required 35 percent of an average wage earner’s income, above the historical average of 32.0 percent.
Counties with the highest share of wages needed to buy a median priced home in the fourth quarter were Kings County (Brooklyn), N.Y. (128.8 percent); Marin County, Calif.(124.1 percent); Santa Cruz County, Calif. (118.2 percent); Monterey County, Calif. (96.9 percent); and San Luis Obispo County, Calif. (94.4 percent), ATTOM found.
Counties with the lowest share of wages needed to buy a median-priced home in the fourth quarter were Baltimore City, Md. (13.1 percent); Bibb County (Macon), Ga. (13.5 percent); Clayton County, Ga. (15.5 percent); Peoria County, Ill. (15.7 percent); and Wayne County (Detroit), Mich. (15.9 percent), ATTOM said.