Historic affordability declining in three quarters of the US market – NMP

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ATTOM’s Fourth Quarter 2021 U.S. Housing Affordability Report shows that a typical home remains within the means of the average wage earner, but historic affordability is declining in three-quarters of the U.S. market.

Median-priced single-family homes are less affordable in the fourth quarter compared to historical averages in 77% of counties nationwide. This is just 39% of counties that were historically less affordable in the fourth quarter of 2020, the highest level in 13 years, as house prices continue to rise faster than wages in much of the country.

The report also determined the amount of income needed to cover major monthly homeownership expenses – including mortgage, property taxes, and insurance – on a median-priced single-family home, assuming a down payment of $ 20. % and a maximum “initial” debt of 28%. in relation to income. The required income was compared to data on the annualized average weekly salary from the Bureau of Labor Statistics.

Compared to historical levels, median home prices in 440 of the 575 counties analyzed in the fourth quarter of 2021 are less affordable than past averages. That figure has risen as the national median home price climbed 17% in the past year to a record high of $ 317,500.

The report concludes that the major monthly costs of homeownership remain within the financial means of average salaried workers across the country in the fourth quarter of this year. However, the percentage of counties where accessibility is worse than historical averages reached another high since the third quarter of 2008.

“The average wage earner can still afford a typical home across the United States, but the financial comfort zone continues to shrink as home prices continue to soar and mortgage rates rise,” Todd said. Teta, Product Manager at ATTOM. “Historically low rates and rising wages are still the main reasons workers can meet or come very close to standard lending criteria in the majority of the countries we analyze. But the share of wages required for major nationwide property spending is approaching levels where banks are becoming less likely to offer home loans. In highly uncertain times, with the pandemic once again threatening the economy, we will continue to monitor this key measure of housing market stability. “

The top costs of owning median-priced homes in Q4 2021 consume less than 28% of average local wages in 296 of the 575 counties analyzed in this report (51%), assuming a 20% down payment. This was about the same as the third quarter of 2021 for the same group of counties, but down from around two-thirds in the fourth quarter of last year.

Annual salaries of more than $ 75,000 are needed to cover the significant costs of a median-priced home purchased in the fourth quarter of 2021 in just 114, or 20%, of the 575 markets in the report.

The 30 highest annual salaries required to afford typical homes are all found on the East or West Coasts, led by New York County (Manhattan), NY ($ 274,679); San Mateo County (outside of San Francisco), California ($ 252,589); San Francisco County, California ($ 251,054); Santa Clara County (San Jose), CA ($ 229,301) and Marin County (outside of San Francisco), CA ($ 223,713).

The lowest annual wages required to afford a median-priced home in the fourth quarter of 2021 are in Schuylkill County, Pa. (Outside of Allentown) ($ 10,927); Bibb County (Macon), Georgia ($ 16,483); Cambria County, PA (outside of Pittsburgh) ($ 17,784); Macon County (Decatur), IL ($ 19,317) and Blair County (Altoona), Pennsylvania ($ 20,363).


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