Here’s an eye-popping statistic for you. According to ATTOM Data Solutions, median priced homes in 74% of US counties were unaffordable to average wage earners in Q2 2019. Los Angeles County, Cook County (Chicago), Maricopa County (Phoenix), San Diego County and Orange County were the most populated counties where average wage earners could not afford to purchase median-priced homes.
Median-priced homes that were still affordable to average wage earners in Q2 2019 were in Harris County (Houston), Wayne County (Detroit), Philadelphia County, Cuyahoga County (Cleveland), and Franklin County (Columbus).
(ATTOM assumed a 3% down payment and 28% maximum “front end” debt-to-income ratio in its analysis of median-price home affordability by county. ATTOM then compared annualized average weekly wage data from the Bureau of Labor Statistics to come up with its analysis.)
Home price appreciation outpaced average weekly wage growth in 40% of US counties while, conversely, average weekly wage growth outpaced home price appreciation in 60% of US counties. 61% of county housing markets were less affordable when compared with historic affordability averages, up from 50% of counties in Q1 2019 and down from 74% in Q2 2018.
That being said, ATTOM found that 82% of counties posted better housing affordability compared to one year ago. The 18% of less affordable counties compared to one year ago included Salt Lake County, St. Louis County, Macon County (Indianapolis), Middlesex County in New Jersey and Jackson County (Kansas City) in MO.
Todd Teta, ATTOM’s chief product officer, said. “Despite falling mortgage rates and rising wages, the cost of owning the typical home remains out of reach or a significant financial stretch for the nation’s average wage earners. However, a closer look at the data reveals milder than usual increases for the Spring and none as severe as in previous years since the recession. Therefore, this can help predict that the market may be easing…”