Home affordability lagged historical norms in 98 percent of U.S. counties in the third quarter as mortgage rates neared 2023 highs, according to Attom.
Major monthly expenses on median-priced single-family homes and condos exceeded historical averages in 570 of the 583 counties analyzed, according to the property data firm’s third-quarter U.S. Home Affordability Report released Thursday.
The national median home sales price fell to $368,000, down 1 percent from $370,000 in the second quarter and 2 percent from $375,000 a year earlier. The 30-year fixed mortgage rate reached 7.3 percent and the 15-year fixed rate reached 6.6 percent by the end of the quarter, levels Attom said were approaching highs last seen in 2023. The consumer price index rose throughout the quarter.
“Affordability remained a challenge in the third quarter, even as some of the underlying factors moved in a favorable direction,” Attom CEO Rob Barber said in a statement. “Home prices declined nationally and wage growth outpaced price growth in many counties, but those gains were not enough to meaningfully improve affordability across much of the country.”
By the numbers
Figures from Attom’s third-quarter report:
- $90,191: Annual income needed to afford the national median-priced home
- $79,534: National average wage, based on Bureau of Labor Statistics data
- 31.8 percent: Share of the typical worker’s wages consumed by ownership costs on a median-priced home
- 180 counties: Markets where ownership costs topped 43 percent of wages, a level Attom classifies as seriously unaffordable
- 375 counties: Markets where median prices rose year over year, 64.3 percent of those analyzed
- 343 counties: Markets where wages grew faster than home prices, 58.9 percent of those analyzed
Attom’s model assumes a 20 percent down payment and caps mortgage payments, property taxes and insurance at 28 percent of income.
Coastal counties top the least affordable list
California accounted for 12 of the 25 counties where ownership costs took the largest share of wages. New York had six, New Jersey had three and Hawaii had two.
Kings County (Brooklyn), New York, ranked as the least affordable, with costs on a median-priced home consuming 114.1 percent of the typical resident’s wages. Santa Cruz County, California, followed at 105.5 percent, then Marin County, California, at 102.4 percent.
Buyers in Manhattan needed the highest income to afford a median-priced home, at $409,992, followed by San Mateo County, California, at $381,550.
Large counties where homeownership is affordable
Among the largest counties analyzed, homeownership remained affordable for typical residents in Wayne County, Michigan, where costs consumed 17.9 percent of wages, as well as Philadelphia County, Pennsylvania, at 20.2 percent and Harris County, Texas, at 20.7 percent.
