Following the week’s earlier news of the least affordable metro areas, of which San Francisco/Oakland took the un-coveted top spot, ATTOM Data Solutions says that the third quarter of 2021 has brought home affordability to levels not seen in more than a decade.
According to ATTOM’s 2021 U.S. Home Affordability Report, median-priced single-family homes are less affordable in the third quarter compared to historical averages in 75 percent of counties across the nation. That is up from 56 percent of counties in Q3 of 2020, to the highest point since 2008.
As home prices have continued rising in most of the country for the 10th consecutive year, ATTOM’s analysts note that home prices have increased faster than wages in much of the country.
“The typical median-priced home around the U.S. remains affordable to workers earning an average wage, despite prices that keep going through the roof. Super-low interests and rising pay continue to be the main reasons why,” said Todd Teta, chief product officer with ATTOM. “But affordability keeps inching in the wrong direction as the housing market boom keeps roaring ahead. That’s pushing average workers closer and closer to the point where lenders might be reluctant to give them a mortgage.
Breaking down the statistics, 430 out of 572 counties analyzed in Q3 are less affordable than their past averages. ATTOM also notes that the median national home price has increased by 18 percent over the last year to about $315,500.
The affordability index is based on the percentage of average wages needed to pay for major expenses on a median-priced home with a 30-year fixed rate mortgage and 20 percent down payment. Those expenses include property taxes, home insurance, mortgage payments and mortgage insurance.
The most populous of the 269 counties where major expenses on median-priced homes are unaffordable for average local workers were Los Angeles County; Maricopa County (Phoenix), AZ; San Diego County; Orange County; Miami-Dade County, FL.
For more on the Q3 report, click here.