Median-Priced Homes Unaffordable for Average Wage Earners in 74 Percent of U.S. Housing Markets

June 28, 2019

ATTOM Data Solutions, Irvine, Calif., said median home prices in the second quarter of 2019 were not affordable for average wage earners in 74 percent of U.S. housing markets.

The company’s Q2 2019 U.S. Home Affordability Report said 353 of 480 U.S. counties analyzed. The report determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments, including mortgage, property taxes and insurance, on a median-priced home, assuming a 3 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio.

“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,” said Todd Teta, chief product office with ATTOM Data Solutions. “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 indicate the market may be easing, following similar indicators from recent home-flipping and foreclosure data trends.”

Other report data:

–Largest populated counties where a median-priced home in the second quarter was not affordable for average wage earners included Los Angeles County, Calif.; Cook County (Chicago), Ill.; Maricopa County (Phoenix), Ariz.; San Diego County, Calif.; and Orange County, Calif..

–The 127 counties (26 percent) where a median-priced home in the second quarter was still affordable for average wage earners included Harris County (Houston), Texas; Wayne County (Detroit), Mich.; Philadelphia County, Pa.; Cuyahoga County (Cleveland), Ohio; and Franklin County (Columbus), Ohio.

–Home price appreciation outpaced average weekly wage growth in 192 of the 480 counties analyzed in the report (40 percent), including Maricopa County (Phoenix), Ariz.; Riverside County, Calif.; San Bernardino County (Riverside), Calif.; Tarrant County (Dallas-Fort Worth), Texas; and Wayne County (Detroit), Mich..

–393 of the 480 counties analyzed in the report (82 percent) posted a year-over-year increase in the affordability index. Eighty-seven counties analyzed in the report (18 percent) posted a year-over-year decrease in their affordability index.