The average American still can’t afford to buy a typical home in a large majority of U.S. counties, though the situation is improving.
In the fourth quarter of 2019, the local median-priced home was outside of financial reach for average wage earners in 344 of 486 U.S. counties, or 71 percent, of those markets analyzed by ATTOM Data Solutions in a recent report.
That’s improved from 73 percent in the third quarter of 2019 and 75 percent a year ago, according to ATTOM.
Rising wages and lower mortgage rates have helped make homes relatively cheaper. A slight majority of markets — 53 percent — are now more affordable than their historic averages, according to ATTOM. That’s up from 29 percent just a year ago, and 48 percent in the third quarter.
“As long as people are earning more money and shelling out less to pay off home loans, the market should remain strong with prices continuing to rise, at least in the near term,” said Todd Teta, chief product officer of ATTOM, in a statement. “Those are big ifs, but for now this report offers some decent findings for both home seekers and home sellers.”
ATTOM counted markets as affordable if a worker earning the average annual wage (based on U.S. Bureau of Labor Statistics data) could spend 28 percent or less of his or her monthly income to cover mortgage payments (assuming a 3 percent down payment), property taxes and insurance on a median-priced home.
The 486 counties analyzed by ATTOM have a combined population of 235.2 million people, covering around 70 percent of the total U.S. population.
The largest counties where a median-priced home in the fourth quarter wasn’t affordable included Los Angeles County, Calif.; Maricopa County (Phoenix), Ariz.; San Diego County, Calif.; Orange County, Calif. (outside Los Angeles) and Miami-Dade County, Fla.
The counties where a median-priced home in the fourth quarter of 2019 was affordable included Cook County (Chicago) Ill.; Harris County (Houston), Texas; Wayne County (Detroit), Mich.; Philadelphia County, Pa. and Cuyahoga County (Cleveland), Ohio.
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