Home affordability continues dropping in the midst of national median home prices rising to another new high.

Homes for Average Wage Earners Becoming Less Affordable in More Places

The Q3 2021 Home Affordability Report by ATTOM Data Solutions indicates that median-priced single-family homes are less affordable when compared with historical averages in 75% of counties, or 430 of the 572 counties analyzed, across the US.

Just one year ago in Q3 2020, 56% of counties in the US were considered to be less affordable for average wage earners.  Jumping from 56% to 75% of counties being less affordable in just one year is, or ought to be, quite eye-opening.

While major ownership costs on a median-priced home remain within the financial reach of average workers, the percentage of counties where affordability is worse than historical averages has now hit the highest point since March 2008.

Manageable BUT Less Affordable

This pattern of manageable but less affordable is the result of home prices rising faster than wages.  In Q3 2021, major homeownership costs (mortgage payments, home insurance, property taxes) consumed 24.9% of the average national wage of $64,857.  Sure, 24.9% of the average wage is less than the preferred “no more than 28%” of the average wage but still…

Todd Teta, ATTOM’s chief product officer, said, “The typical median-priced home around the US remains affordable to workers earning an average wage, despite prices continuing to go through the roof.  Super-low interests and (ever-so-slight) rising pay continue to be the main reasons why… but, affordability keeps inching in the wrong direction as the housing market boom keeps roaring ahead.  That’s pushing average workers closer and closer to the point where lenders might be reluctant to give them a mortgage.”

Home Prices Up at least +10% in Nearly 67% of Counties

Among the 43 counties with populations of at least 1M people, counties with the biggest y/y gains in median prices during Q3 2021 included:

  • Middlesex County (outside Boston) – +32%
  • Maricopa County (Phoenix) – +24%
  • Travis County (Austin) – +23%
  • Hillsborough County (Tampa) -+22%
  • Clark County (Las Vegas) – +22%

Counties with populations of at least 1M people with the smallest y/y price gains in median prices during Q3 2021 included:

  • New York County (Manhattan) – less than 1%
  • Fairfax County (outside Washington DC) – +5%
  • Santa Clara County (San Jose) – +6%
  • Suffolk County (eastern Long Island) – +7%
  • Dallas County – +7%

Counties that Less Affordable than Historic Averages in Q3 2021

(Indexes of less than 100 are considered to be less affordable when compared to their historic averages.)

  • Wayne County (Detroit) – 71
  • Tarrant County (Fort Worth) – 78
  • Oakland County (outside Detroit) – 78
  • Maricopa County (Phoenix) – 79
  • Travis County (Austin) – 79

Counties with Worst Affordability Indexes in Q3 2021

  • Canyon County ID (outside Boise) – 58
  • Blount County TN (outside Knoxville) – 64
  • Ada County ID (Boise) – 67
  • Grayson County TS (outside Dallas) – 67
  • Rutherford County TN (Murfreesboro) – 68

Thanks to ATTOM Data Solutions.

 

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