The median price for a single-family home was more expensive than historical averages in a whopping 79% of the nation’s counties during Q1 2022.
Affordability Slips in Q1 2022
The portion of wages now required for homeownership grew at the fastest pace in more than 15 years in Q1 2022, according to ATTOM’s Q1 2022 US Home Affordability Report.
Nearly 80% of counties across the country, 79%, reported that median-priced single-family homes were less affordable in Q1 2022 when compared to historical averages. This 79% is double the 38% of counties that reported less affordability during Q1 2021. This 79% of US counties is also the highest percentage of lessening affordability since mid-2008, according to ATTOM.
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Rick Sharga, ATTOM’s now executive vice president of market intelligence, said, “It’s certainly no surprise that affordability is more challenging today for prospective homebuyers than it was a year ago. Historically low mortgage rates and higher wages helped offset rising home prices over the past few years, but as home prices continue to soar and interest rates approach five percent (level) on a 30-year fixed-rate loan, more consumers are going to struggle to find a property they can comfortably afford.”
Median Home Prices Become Increasingly Less Affordable
Compared with historical levels, median home prices in 461 of the 586 counties ATTOM analyzed for this report (up from 449 in Q4 2021 and up from 224 counties in Q1 2021) were less affordable in Q1 2022 than in the past.
The median national single-family home price jumped to a record high of $320,000 in Q1 2022, an increase of +16% y/y. Average wages, on the other hand, increased just +7% y/y.
Homeownership costs ate up 26.3% of the $66,560 average national wage in Q1 2022. Though 28% going to homeownership costs is considered to be the limit of affordability by common lending standards , 26.3% is the highest percentage of average wages going towards homeownership costs since Q3 2008. 26.3% is also the largest annual increase of average wages needed to cover homeownership costs since, according to ATTOM, at least 2005.
Largest Counties that Affordable and Unaffordable in Q1 2022
Based on the 28% guideline, about half of the 586 counties analyzed for ATTOM’s latest housing affordability report remained affordable. The largest affordable counties included:
- Cook County (Chicago) IL
- Harris County (Houston) TX
- Dallas County TX
- Bexar County (San Antonio) TX
- Wayne County (Detroit) TX
The largest counties that were unaffordable for average local workers in Q1 2022 included:
- Los Angeles County CA
- Maricopa County (Phoenix) AZ
- San Diego County CA
- Orange County (outside Los Angeles) CA
- Kings County (Brooklyn) NY
Additional Data Points of Interest in ATTOM’s Q1 2022 US Home Affordability Report
- Home prices jumped at least +10% y/y in 66% of country
- Home price gains exceeded wage growth in four of every five markets
- One in four counties require annual wages of more than $75,000 to afford typical home
- Home ownership costs remain less than 28% of average local wages in almost 50% of nation
- Homeownership less affordable than historic averages in 79% of US counties
- Only one in five markets more affordable than historic averages in Q1 2022
Important comment: ATTOM’s Rick Sharga said, “…the ‘x-factor’ is what impact 8% (now 8.5%) inflation rates will have on affordability (going forward) …rising food and energy prices could be a hidden factor that makes affordability even more of a challenge for homebuyers and makes it more difficult to make ends meet for current homeowners.”
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Thanks to ATTOM.