Home affordability worsened in the fourth quarter, as home prices were higher on average compared with the third quarter, according to ATTOM’s latest U.S. Home Affordability Report.
About 98% of U.S counties saw home affordability decrease during the fourth quarter, despite a slight decrease in mortgage rates, according to the report.
The report also shows that major expenses on median-priced homes now consume 34% of the average national wage.
That level marks an increase of more than one percentage point both quarterly and annually, pushing the figure even farther above the common 28% lending guideline preferred by lenders.
The national median home price climbed to $364,750 in the fourth quarter, while mortgage rates remained over 6%.
“The U.S. housing market continues to generate great profits for most home sellers but also more and more financial stress for would-be buyers,” says Rob Barber, CEO for ATTOM, in a statement. “Average workers now must shell out a larger portion of their wages for major home-ownership expenses than at any time since right before the housing market tanked in the late 2000s.”
“Despite recent declines in mortgage rates, down payments on typical home purchases have reached four times the average national wage,” Barber adds. “At some point, something’s got to give, or a growing number of buyers will have no choice but to toss in the towel and wait for home ownership to become more affordable. But we clearly are not there yet.”
Photo: Alexander Grey
