Home Affordability Declines While Prices Soar

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Key Highlights

  • Median single-family home and condominium prices less affordable than historical averages during Q2 2021 in 61% of US counties
  • In Q2 2020, 48% of counties had the highest point of non-affordability in two years

Spike of +22% y/y in Median Home Price Squeezing Affordability

ATTOM Data Solutions just released its 2021 US Home Affordability Report.  This report reflects bad news for many wage earners in 61% of counties across the nation.  Last year “only” 48% of US counties saw their home prices increase faster than wages.

ATTOM determines affordability by calculating the amount of income necessary to meet monthly homeownership costs (mortgage, property taxes, insurance) on a median-priced home and assuming a 20% down payment and 28% front end debt-to-income ratio.

Homeownership Costs Still Remain Doable

Despite home ownership costs remaining doable on median-priced homes for average workers in Q2 2021, the percentage of counties where affordability has become worse than historical averages has hit the highest point since Q2 2019.

According to Todd Teta, ATTOM’s chief product officer, “Average workers across the country can still manage the major expenses of owning a home, based on lender standards.  But things have gone in the wrong direction this quarter in a majority of markets as the national housing market boom roars onward.”

Home Prices Up Minimum of 10% in 61% of Country

Counties with the largest y/y gains in median prices included:

  • San Bernardino County CA – +25%
  • Mecklenburg County (Charlotte) NC – +24%
  • Maricopa County (Phoenix) AZ – +21%
  • Hillsborough County (Tampa) FL – +20%
  • Middlesex County (outside Boston) MA – +20%

Price Gains Outpace Wage Growth in 72% of Markets

Home-price appreciation was greater than y/y wage growth during Q2 2021 in 71% of all US counties analyzed by ATTOM.   Counties with the largest home-price appreciation included Los Angeles Count CA, Harris County (Houston) TX, Maricopa County (Phoenix) AZ, San Diego County CA and Orange County (outside of Los Angeles) CA.

 

Thanks to ATTOM Data Solutions.

 

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