According to Attom Data Systems, the average wage earner (one wage earner, not two wage earners, making $57,009/year) could not afford a median priced home in 68% (304 out of 446) counties in the United States.
What does affordability mean? According to Attom, affordability means the amount of income one person needs to spend in order to make monthly home payments (mortgage payments, property taxes, home insurance) on a median priced home with a 3% down payment and a 28% maximum “front-end” debt-to-income ratio.
This data isn’t quite as bleak as it sounds…most recent buyers, 66% of them according to the National Association of REALTORS, are married couples and 8% are unmarried couples. In today’s world, married and unmarried couples mean two wage earners. That means that only 25% or ¼ of recent buyers bought their house on their own as a single, uncoupled person.
All this being said, affordability persists as a problem for potential homebuyers. Michael Mahon, president of First Team Real Estate, told Attom Data Systems, “Home affordability continues to be a symptom relating to the cultural divide of wage earners. Median wage earners are finding coastal communities unaffordable across Southern California while driving migration…to create housing demand booms in such California counties as Riverside…recently recognized as on of the fastest growing counties in the state.”
Around the country, the highest negative net migrations (more people leaving than coming) were
- 29,246 people left New York’s Kings (Brooklyn) and Manhattan Counties
- 9,309 people left California’s Santa Clara County (San Jose) and Orange County
The largest net migrations (more people coming than leaving) were
- 489,770 people coming into Maricopa County (Phoenix)
- 36,635 people coming into Clark County (Las Vegas)
- 23,397 people coming into Riverside County
- 21,333 people coming into Denton County, TX (Dallas)
- 20,603 people coming into Hillsborough County, FLA (Tampa – St. Petersburg metro)
Counties in which average wage earners spend the most on housing costs are
- 0% – Kings County (Brooklyn)
- 8% – Santa Cruz County in CA
- 3% – Marin County (just over CA’s Golden Gate Bridge)
- 1% – Hawaii
- 5% – Manhattan
Counties in which average wage earners spend the least on housing costs are
- 2% – Baltimore City, Maryland
- 0% – Bibb County (Macon) Georgia
- 3% – Wayne County (Detroit)
- 0% – Clayton County (Atlanta)
- 4% – Rock Island County (Quad City, IL)
Attom senior vice president, Darren Blomquist, said “Coastal markets are the epicenter of the US home affordability crisis, but affordability aftershocks are now being felt further inland as housing refugees migrate from high-cost coastal markets to lower0-priced markets in the middle of the country where good jobs are available. That, in turn, is pushing home prices above historically normal affordability limits in those middle American markets.”
Blomquist to average wage earners who aspire to buy a house in an affordable market…””buy as soon as possible…demand from out-of-state buyers will drive up prices.”
