In most areas of the U.S., the median home price is unaffordable to a worker making an average wage in that area, a recent analysis from ATTOM Data Solutions shows.
According to the firm’s U.S. Home Affordability Report, the median home price in the second quarter was unaffordable to the average wage earner in 353 of 480 U.S. counties.
That’s 74% of the country.
Top markets where it was near-impossible for an average wage earner to afford single-family housing included Los Angeles County, Calif.; Cook County (Chicago), Ill.; Maricopa County (Phoenix), Ariz.; San Diego County, Calif.; and Orange County, Calif.
“Despite falling mortgage rates and rising wages, the cost of owning the typical home remains out of reach or a significant financial stretch for the nation’s average wage earners,” says Todd Teta, chief product office with ATTOM Data Solutions, in the report. “However, a closer look at the data reveals milder-than-usual increases for the spring, and none as severe as in previous years since the recession. Therefore, this can help indicate the market may be easing, following similar indicators from recent home-flipping and foreclosure data trends.”
Fortunately, wage growth is trying to catch up: Average weekly wage growth outpaced home price appreciation in 288 of the 480 counties analyzed in the report.
That’s 60% of markets tracked.
Top markets where wage growth outpaced home price appreciation in the second quarter included Miami County, Fla.; Kings County, N.Y.; Dallas County, Texas; Queens County, N.Y.; and Clark County, N.Y.
As a result of rising wage growth and moderating home prices, 82% – or 393 of 480 counties analyzed in the report – posted better affordability compared to year ago.
Top markets where home prices were more affordable than a year ago included Los Angeles County, Calif.; Cook County (Chicago), Ill.; Harris County (Houston), Texas; Maricopa County (Phoenix), Ariz.; and San Diego County, Calif.