Home Prices Still Unaffordable in 66 Percent of Local Markets

Todd Teta

IRVINE, CA — ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), released its first-quarter 2020 U.S. Home Affordability Report, which shows that median home prices in the first quarter of 2020 are unaffordable for average wage earners in 319 of 483, or 66 percent of the U.S. counties analyzed in the report.

 But that figure is down from 70.4 percent in the fourth quarter of 2019 and 69.8 percent from the first quarter of 2019.

The report also shows that owning a median-priced home in the first quarter of 2020 in the United States – costing $252,500 – consumes 31.1 percent of the national average wage.

That percentage is down from 31.4 percent in the fourth quarter of 2019 and 31.6 percent in the first quarter of 2019, to the lowest percentage since the fourth quarter of 2017, when the average workers were spending 30.8 percent of wages to own a home.

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.

That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics.

“Home affordability has inched ahead this year across the United States as buying a house or a condo gets closer and closer to the level where the average wage earner can swing the deal within standard lending guidelines," said Todd Teta, chief product officer with ATTOM Data Solutions.

 "While the national median price still remains a bit out of reach for the average wage earner, the affordability gap has narrowed to the smallest point in more than two years.

“It seems bizarre that median home prices have risen 8 percent over the past 12 years while average wages grew by less than half that amount.

"But falling interest rates continue making up the difference, dropping monthly home ownership payments in a majority of the country.”

“All that may change in a huge way over the next few months as the impact of the coronavirus hits the housing market. We are entering a period of great uncertainty.

 “But in the initial months of the year, the picture has appeared to continue to brighten for home seekers.”

For a detailed analysis on a county-by-county level, please contact:

 Christine Stricker

949.748.8428

christine.stricker@attomdata.com

Data and Report Licensing:

949.502.8313

datareports@attomdata.com