Rising home prices in many areas remain a financial stretch for a majority of households
Median home prices were out of reach for the average wage earner in the first quarter of this year, according to ATTOM’s latest Home Affordability Report.
The report calculated the amount of income needed to make monthly house payments to determine their affordability for average wage earners.
The results showed that 71% of wage earners in 335 of 473 counties across the US were unable to afford median home prices recorded in the first quarter of 2019. Counties in the report included several in California, Arizona, and Florida.
Out of the 473 counties analyzed, average wage earners in 138 counties or 29% could still afford a median-priced home in the first quarter. This included counties in Chicago, Houston, Detroit, Philadelphia, and Cleveland.
"We are seeing a housing market in flux across the United States, with a mix of tailwinds and headwinds that are pricing many people out of the housing market, but also are creating potentially better conditions for buyers," said Todd Teta, chief product officer at ATTOM Data Solutions. "Continually rising home prices in many areas do remain a financial stretch – or simply unaffordable – for a majority of households. However, quarterly wage gains have been outpacing prices increases for more than a year and mortgage rates are falling, which have helped make homes a bit more affordable now, than they've been in a year.”
“Affordability may improve because of the simple fact that homes are out of reach for so many home seekers, suggesting that prices need to moderate down in order to attract buyers,” said Teta. “Of course, a few quarters do not a long-term trend make. The economy could slow. The impact of last year's tax cuts could fade, and interest rates could go back up, but the signs point to the possibility of an impending buyers' market."
