Key Highlights
- Affordability worse than historical averages in nearly 2/3 of country, according to ATTOM Data Solutions
- Median home prices up at least 10% in 50% of US
ATTOM Data Solutions’ Q3 2020 US Home Affordability Report indicates that the median home prices of single-family homes and condominiums are less affordable in Q3 2020 than historical averages in 63% of the nation’s counties. In other words, the portion of wages now needed for home ownership is more than 28% than the lending benchmark in nearly two-thirds of the nation.
Download Your FREE Ultimate Agent Survival Guide Now. This is the exact ‘do this now’ info you need. Learn NOW How to Access All The Bailout Program Cash You Deserve. Including Unemployment and Mortgage Forbearance Plans. To Access the Ultimate Agent Survival Guide Now Text The Word SURVIVAL to 47372. 4 Msgs/Month. Reply STOP to cancel, HELP for help. Msg&data rates may apply. Terms & privacy: slkt.io/JWQt
The country’s lending benchmark regarding an income amount necessary for homeownership assumes a 28% maximum “front-end” debt-to-income ratio to make monthly house payments including mortgage, property taxes and insurance on a median-priced home with a 20% down payment. This required income is then compared to annualized average weekly wage data from the Bureau of Labor Statistics.
In Q3 2019, 262 of 487 counties were less affordable than historical levels; in Q3 2020, 308 of 487 counties are less affordable. This all translates into 61% of counties being unaffordable for average wage earners.
ATTOM’s Todd Teta, chief product officer, said, “In a year when nothing is normal, owning a single-family home has become less affordable to average wage earners across the US…” despite the fact that mortgage rates sit at rock-bottom levels and wages have increased. Teta continued. “…the American economy has suffered greatly since the Coronavirus pandemic began surging…a plight that normally would drop home demand and home prices. But…other factors have led a lot of buyers into the market chasing a reduced supply of homes. The result is price hikes have raced past the impact of wages and mortgage rates.”
The largest counties where median home prices are not affordable for average wage earners in Q3 2020 include Los Angeles County, Maricopa County (Phoenix); San Diego County, Orange County and Miami Dade County in Florida.
The largest counties where median home prices are affordable for average wage earner in Q3 2020 include Cook County (Chicago); Harris County (Houston); Philadelphia County, Hillsborough County (Tampa), and Cuyahoga County (Cleveland).
Even though wage growth is on the upswing, home price appreciation is outpacing average weekly wage growth in almost 90% of housing markets in Q3 2020. The result? Average wage earners need to make more than $75,000/year to afford a median-priced home in 23% of the nation’s 487 markets analyzed in ATTOM’s latest Home Affordability Report.
Thanks to ATTOM Data Solutions.
Also read: Recession? Really? Buying Season Hot As the Summer Just Like the Prices, Home Flipping Rate in Q1 Hits 14-Year High While ROI Plunged to 9-Year Low, Zip Codes with Highest Foreclosure Rates in July 2020
