ATTOM: Home Prices Rising Faster Than Wages, Making Homeownership a ‘Pipe Dream’ for Many


Home prices are rising faster than wages in half the U.S., a report from ATTOM shows.

And while the portion of wages needed for homeownership dipped in the first quarter compared with the fourth quarter, it remained up annually in most of the nation.

With mortgage rates tracking downward in recent months after rising last year, the portion of average local wages consumed by major expenses on median-priced, single-family homes and condos has decreased from the fourth quarter to the first quarter in 91.5% of the 590 counties analyzed in ATTOM’s first-quarter 2024 U.S. Home Affordability Report. However, it remained up annually in 90.3 percent of those markets.

The typical $1,930 cost of mortgage payments, homeowner insurance, mortgage insurance and property taxes nationwide consumed 32.3% of the average annual national wage of $71,708 in the first quarter.

That is down from 33.2% in the fourth quarter of 2023 as expenses commonly have dropped almost 3% while wages have remained flat nationwide.

But the latest portion is up from 29.6% in the first quarter of last year and is far above the recent low point of 21.3 hit in the first quarter of 2021.

With home values mostly up annually throughout the U.S., year-over-year price changes are outpacing changes in weekly annualized wages during the early months of 2024 in 358, or 60.7%, of the counties analyzed in the report.

It’s also more expensive to own a home: In almost a third of the markets analyzed, major expenses currently consume at least 43% of average local wages – an amount considered seriously unaffordable.

Home ownership on the northeast and west coasts still eats up largest chunk of wages, ATTOM says.

“The picture for home buyers is brightening a little again as affordability measures have improved for the second quarter in a row,” says Rob Barber, CEO for ATTOM. “For sure, it’s not like things are coming up roses for house hunters. Affording a home remains a financial stretch, or a pipe dream, for so many households. But with mortgage rates coming down and home prices growing only by modest amounts, it’s gotten a bit easier for average wage earners to afford a home so far this year. The upcoming Spring buying season will say a lot about whether home prices remain stable enough for this trend to continue.”

Photo: Grahame Jenkins

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