The average home prices during Q1 2020 were deemed unaffordable for average wage earners in 66% of U.S. counties, according to ATTOM Data Solutions. [1]
This is a drop from Q4 2019, which found earners in 70.4% of U.S. counties found the average home to be unaffordable. This is also a drop from the 69.8% recording in Q1 2019.
Additionally, owning a median-priced home in Q1 2020—$252,500—takes up 31.1% of the national average wage. This is a slight decline from the prior quarter’s 31.4% reading and Q1 2019’s figure of 31.6%.
This is also the lowest reading since Q4 2017 when the average worker spent 30.8% to own a home.
“Home affordability has inched ahead this year across the United States as buying a house or a condo gets closer and closer to the level where the average wage earner can swing the deal within standard lending guidelines. While the national median price still remains a bit out of reach for the average wage earner, the affordability gap has narrowed to the smallest point in more than two years,” said Todd Teta, Chief Product Officer with ATTOM Data Solutions. “It seems bizarre that median home prices have risen 8 percent over the past 12 years while average wages grew by less than half that amount. But falling interest rates continue making up the difference, dropping monthly homeownership payments in a majority of the country.”
Teta said the impacts of COVID-19 could change this trend in the coming months.
“We are entering a period of great uncertainty,” he added. “But in the initial months of the year, the picture has appeared to continue to brighten for home seekers.”
The area where a median-price home in Q1 2020 was not found to be affordable included Los Angeles County; Maricopa County (Phoenix); San Diego County; Orange County (California), and Miami-Dade County.
ATTOM found that 34%, or 164 counties, where an average-priced home in Q1 2020 is affordable for average wage earners were Cook County (Chicago); Harris County (Houston); Dallas County; Wayne County (Detroit); and Philadelphia County.