The median home price in the United States in the fourth quarter was at its least affordable level since the third quarter of 2008, according to a new report released by ATTOM Data Solutions, a real estate data firm.
Researchers calculated affordability based on the percentage of income needed to buy a median-priced home relative to historic averages. An index reading above 100 indicates that median home prices are more affordable than the historic average; an index reading below 100 indicates median home prices are less affordable than the average. Among 469 counties tracked by ATTOM, 357—or 76 percent—had an affordability index reading below 100.
“While poor home affordability continues to cloud the U.S. housing market, there are silver linings in the local data as home price appreciation falls more in line with wage growth,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “Affordability improved from the previous quarter in more than half of all local markets, and one in five local markets saw annual wage growth outpace annual home price appreciation, including high-priced areas such as San Diego, Brooklyn, and Seattle.”
Still, home appreciation is outpacing income growth. The median home sales price in the fourth quarter was up 9 percent from a year ago, to $241,250, according to ATTOM, while the average wage is up just 3 percent during that time. Annual home prices in the fourth quarter grew faster than wages in 366 of the 469 counties analyzed by researchers.
A median-priced home in the fourth quarter would require 35 percent of an average wage earner’s income. That is above the historical average of 32 percent, according to the report.
The counties where the highest share of wages was needed to buy a median priced home in the fourth quarter were: Kings County (Brooklyn), N.Y. (128.8%); Marin County, Calif. (124.1%); Santa Cruz County, Calif. (118.2%); Monterey County, Calif. (96.9%); and San Luis Obispo County, Calif. (94.4%).
The counties where consumers need the lowest share of wages to buy a median-priced home in the fourth quarter were: Baltimore City, Md. (12.1%); Bibb County (Macon), Ga. (13.5%); Clayton County, Ga. (15.5%); Peoria County, Ill. (15.7%); and Wayne County (Detroit), Mich. (15.9%).Source: ATTOM Data Solutions
