ATTOM: U.S. Home Affordability at 10-Year Low

ATTOM Data Solutions, Irvine, Calif., said the U.S. median home price in the fourth quarter was at the least affordable level since Q3 2008, a more than 10-year low.

The company’s quarterly U.S. Home Affordability Report said the home affordability index of 91 was down from an index of 94 in the previous quarter and an index of 106 in Q4 2017 to the lowest level since Q3 2008, when the index was 87.

Among 469 U.S. counties analyzed in the report, 357 (76 percent) posted a fourth quarter affordability index below 100, meaning homes were less affordable than the long-term affordability averages for the county. That was down from a 10-year high of 78 percent of counties posting an affordability index below 100 in Q3 2018.

“While poor home affordability continues to cloud the U.S. housing market, there are silver linings in the local data as home price appreciation falls more in line with wage growth,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “Affordability improved from the previous quarter in more than half of all local markets, and one in five local markets saw annual wage growth outpace annual home price appreciation, including high-priced areas such as San Diego, Brooklyn and Seattle.”

The report said home affordability worsened compared to the previous quarter in 197 of the 469 counties analyzed in the report (42 percent), including Los Angeles County, Calif.; Maricopa County (Phoenix), Ariz.; Riverside County, Calif.; San Bernardino County, Calif.; and Clark County (Las Vegas), Nev.

ATTOM said nationwide, buying a median-priced home in the fourth quarter would require 35.0 percent of an average wage earner’s income, above the historical average of 32.0 percent. Counties with the highest share of wages needed to buy a median priced home in the fourth quarter were Kings County (Brooklyn), N.Y. (128.8 percent); Marin County, Calif. (124.1 percent); Santa Cruz County, Calif. (118.2 percent); Monterey County, Calif. (96.9 percent); and San Luis Obispo County, Calif. (94.4 percent).

The report said buying a median-priced home required more than $100,000 in annual income (assuming 3 percent down and a maximum front-end debt-to-income ratio of 28 percent) in 70 of the 469 counties analyzed in the report, led by New York County (Manhattan), N.Y. ($408,977 to buy); San Francisco County, Calif. ($375,491); San Mateo County, Calif. ($368,242); Marin County, Calif. ($315,524); and Santa Clara County (San Jose), Calif. ($308,178).