Housing affordability in Q4 2018 dropped to its lowest levels nation-wide since Q3 2008. According to the ATTOM Data Solutions Housing Affordability Index (HAI), Q4 2018 scored 91 points on the HAI, three points lower than in Q3 2018 and 15 points lower than Q4 2017. This score of 91 points is the lowest score since Q3 2008 when the HAI was 87.
ATTOM bases its HAI on the percentage of income needed to buy a median priced home. An Index score above 100 is more affordable than historic averages; an Index score below 100 is less affordable than historic averages.
Daren Blomquist, senior vice president of ATTOM Data Solutions, said, “While poor home affordability continues to cloud the US housing market, there are silver linings in local data as home price appreciation falls more in line with wage growth. Affordability improved from the previous quarter in some local markets and one in 5 local markets saw annual wage growth outpace annual home price appreciation in 22% of local markets including…”high priced markets such as San Diego, Seattle, Brooklyn, New York and San Jose.
Counter to national trends, affordability improved in 272 of the 469 counties analyzed by ATTOM. Counties with the most affordability improvement included Cook County (Chicago), Harris County (Houston), San Diego County and Orange and Miami-Dade Counties in Florida. Counties where affordability worsened in Q4 2018 included Los Angeles County, Maricopa County (Phoenix), Riverside County, San Bernardino County and Clark County (Las Vegas).
The median price of a home in Q4 2018 was $241,250, an increase of +9% from Q4 2017. The annualized average weekly wage in Q4 2018 was $56,381, an increase of +3% from Q4 2017 nationwide.
Again nationwide, 35% of an average wage earner’s income was needed to buy a median priced home in Q4 2018, higher than the historic average of 32%.
Counties requiring the highest share of a wage earner’s income to buy a home in Q4 2018 were…
- Kings County (Brooklyn) – 128.8%
- Marin County (San Francisco) – 124.1%
- Santa Cruz County – 118.2%
- Monterey County – 96.9%
- San Luis Obispo – 94.4%
(Note that 4 of the 5 counties listed above are in California.)
Counties requiring the lowest share of a wage earner’s income to buy a home in Q4 2018 were…
- Baltimore City/County – 13.1%
- Bibb County (Macon) GA – 13.5%
- Clayton County GA – 15.5%
- Peoria County IL – 15.7%
- Wayne County (Detroit) – 15.9%