Major homeownership expenses – including mortgage payments, property taxes and insurance – now consume about 35% of the average wage nationwide, according to ATTOM’s U.S. Home Affordability Report.
“The latest affordability data presents a clear challenge for home buyers,” says Rob Barber, CEO for ATTOM, in the report. “While home prices are increasing and mortgage rates remain relatively high, these factors are making homes less affordable. It’s common for these trends to intensify during the spring buying season when buyer demand increases. However, the trends this year are particularly challenging for house hunters, more so than at any point since the housing market boom began in 2012.”
The report shows that major expenses on median-priced homes consumed 35.1% of the average national wage in the second quarter – marking the high point since 2007 and standing well above the common 28% lending guideline.
In most areas of the country, the average cost of owning a home is outpacing average wage increases.
The patterns during the months running from April through June came as the national median home price rose 7.3% quarterly and 4.7% annually.
Further hampering buyers during the second quarter were average 30-year home-mortgage rates that ended the quarter at about 6.9% – more than double where they stood in 2021.
Those factors helped boost homeownership expenses by about 10% in the second quarter, after declining slightly in the prior two quarters.