Major Home-Ownership Expenses Now Consume 35
Percent of Average Wage Nationwide; Portion Hits High Point
in Over a Decade as Median Home Price Soars to Another
Record
IRVINE,
Calif., July 3, 2024 /PRNewswire/ -- ATTOM, a
leading curator of land, property and real estate data, today
released its second-quarter 2024 U.S. Home Affordability Report
showing that median-priced single-family homes and condos remained
less affordable in the second quarter of 2024 compared to
historical averages in 99 percent of counties around the nation
with enough data to analyze. The latest trend continued a pattern,
dating back to early 2022, of home ownership requiring historically
large portions of wages around the country amid ongoing high
residential mortgage rates and elevated home prices.
The report also shows that major expenses on median-priced homes
consumed 35.1 percent of the average national wage in the second
quarter – marking the high point since 2007 and standing well above
the common 28 percent lending guideline.
Both the historic and current measures represented quarterly and
annual setbacks following a brief period of improvement from late
2023 into early 2024. The shifts came as the national median home
price spiked to a new high of $360,000 during the Spring buying season and
mortgage rates remained around 7 percent, leading to increases in
the cost of owning a home that outpaced recent increases in
wages.
As a result, the portion of average wages nationwide required
for typical mortgage payments, property taxes and insurance grew
about three percentage points from both the first quarter of this
year and the second quarter of last year.
"The latest affordability data presents a clear challenge for
home buyers. While home prices are increasing and mortgage rates
remain relatively high, these factors are making homes less
affordable," said Rob Barber, CEO
for ATTOM. "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. As the 2024 buying season progresses into the Summer, we will
continue to monitor the data closely."
The patterns during the months running from April through June
came as the national median home price rose 7.3 percent quarterly
and 4.7 percent annually. Further hampering buyers during the
second quarter were average 30-year home-mortgage rates that ended
the quarter at about 6.9 percent, or more than double where they
stood in 2021.
Those factors helped boost home ownership expenses by about 10
percent in the second quarter of 2024 after declining slightly in
the prior two quarters.
The report determined affordability for average wage earners by
calculating the amount of income needed to meet major monthly home
ownership expenses — including mortgage payments, property taxes
and insurance — on a median-priced single-family home, assuming a
20 percent down payment and a 28 percent maximum "front-end"
debt-to-income ratio. That required income was then compared to
annualized average weekly wage data from the U.S. Bureau of
Labor Statistics (see full methodology below).
Compared to historical levels, median home ownership costs in
582 of the 589 counties analyzed in the second quarter of 2024 were
less affordable than in the past. That number was up just slightly
from 579 of the same counties in the first quarter of this year and
from 577 in the second quarter of last year. But it was more than
15 times the figure from early 2021.
Meanwhile, the portion of average local wages consumed by major
home-ownership expenses on typical homes was
considered unaffordable during the second quarter of 2024 in
about 80 percent of the 589 counties in the report, based on the 28
percent guideline. Counties with the largest populations that were
unaffordable in the second quarter were Los Angeles County, CA; Cook County (Chicago), IL; Maricopa County (Phoenix), AZ; San
Diego County, CA, and Orange
County, CA (outside Los
Angeles).
The most populous of the 115 counties with affordable levels of
major expenses on median-priced homes during the second quarter of
2024 were Harris County
(Houston), TX; Wayne County (Detroit), MI; Philadelphia County, PA; Cuyahoga County
(Cleveland), OH, and Allegheny County (Pittsburgh), PA.
View Q2 2024 U.S. Home Affordability Heat Map
National median home price jumps quarterly and annually in
most markets
The national median price for single-family
homes and condos shot up to $360,000
in the second quarter of 2024 - $15,000 more than the previous high of
$345,000 hit in the Spring of 2022.
The latest figure was up from $335,500 in the first quarter of 2024 and from
$344,000 in the second quarter of
last year.
At the county level, median home prices rose from the first
quarter to the second quarter of this year in 514, or 87.3 percent,
of the 589 counties included in the report. Annually, they followed
a similar pattern, up in 441, or 74.9 percent of those markets.
Data was analyzed for counties with a population of at least
100,000 and at least 50 single-family home and condo sales in the
second quarter of 2024.
Among the 47 counties in the report with a population of at
least 1 million, the biggest year-over-year increases in median
prices during the second quarter of 2024 were in Orange County, CA (outside Los Angeles) (up 16.2 percent); Alameda County (Oakland), CA (up 12 percent); King County (Seattle), WA (up 11.3 percent); Santa Clara County (San Jose), CA (up 9.8 percent) and
Nassau County, NY (outside
New York City) (up 8.9
percent).
Counties with a population of at least 1 million where median
prices remained down the most from the second quarter of 2023 to
the same period this year were Honolulu
County, HI (down 3.8 percent); Tarrant County (Forth
Worth), TX (down 1.5 percent); Oakland
County, MI (outside Detroit) (down 1.4 percent); Hennepin County (Minneapolis), MN (down 1.1 percent) and
Fulton County (Atlanta), GA (down 1 percent).
Prices growing faster than wages in half the U.S.
With
home values mostly up annually throughout the U.S., year-over-year
price changes outpaced changes in weekly annualized wages during
the second quarter of 2024 in 293, or 49.7 percent, of the 589
counties analyzed in the report. (Affordability worsened because of
that pattern as well as high interest rates and rising property
taxes).
The latest group of counties where prices increased more than
wages annually included Los Angeles
County, CA; Cook County,
(Chicago), IL; Maricopa County (Phoenix), AZ; San
Diego County, CA, and Orange
County, CA (outside Los
Angeles).
On the flip side, year-over-year changes in average annualized
wages bested price movements during the second quarter of 2024 in
296 of the counties analyzed (50.3 percent). The latest group where
wages increased more than prices included Harris County (Houston), TX; Dallas
County, TX; Queens County,
NY; Tarrant County (Fort
Worth), TX, and Bexar
County (San Antonio),
TX.
Portion of wages needed for home ownership jumps quarterly
and annually in most of nation
As home prices soared and
interest rates stayed relatively high, the portion of average local
wages consumed by major expenses on median-priced, single-family
homes and condos went up from the first quarter of 2024 to the
second quarter of 2024 in 547, or 92.9 percent, of the 589 counties
analyzed. It topped the level from a year earlier in 92.4 percent
of those markets.
The typical $2,114 cost of
mortgage payments, homeowner insurance, mortgage insurance and
property taxes nationwide marked a new high, consuming 35.1 percent
of the average annual national wage of $72,358 last quarter. That was up from 31.9
percent in the first quarter of 2024 and from 32.1 percent in the
second quarter of last year - far above the recent low point of
21.3 percent hit in the first quarter of 2021.
The latest figure exceeded the 28 percent lending guideline in
474, or 80.5 percent, of the counties analyzed, assuming a 20
percent down payment. That was up from 73.2 percent of the same
group of counties in the first quarter of 2024 and 73.5 percent a
year ago. It was roughly twice the level recorded in early
2021.
In more than a third of the markets analyzed, major expenses
consumed at least 43 percent of average local wages, a benchmark
considered seriously unaffordable.
The worst affordability declines generally hit upscale markets
concentrated in the West and Northeast with second-quarter median
prices of at least $450,000. Those
counties already were among the most unaffordable in the
U.S.
Among counties with a population of at least 1 million, the
largest annual increases in the typical portion of average local
wages needed for major ownership expenses were in Orange County, CA (outside Los Angeles) (up from 85.3 percent in the
second quarter of 2023 to 103.4 percent in the second quarter of
2024); Alameda County
(Oakland), CA (up from 73.3
percent to 86.7 percent); Kings
County (Brooklyn), NY (up
from 101.3 percent to 111.8 percent); Nassau County, NY (outside New York City) (up from 66.6 percent to 75.7
percent) and Los Angeles County,
CA (up from 67.4 percent to 76 percent).
Affordability still toughest along northeast and west
coasts
All but one of the top 20 counties where major
ownership costs required the largest percentage of average local
wages during the second quarter of 2024 were on the northeast or
west coasts. The leaders were Santa Cruz
County, CA (113.8 percent of annualized local wages needed
to buy); Kings County
(Brooklyn), NY (111.8 percent);
Marin County, CA (outside
San Francisco) (109.2 percent);
Maui County, HI (105.9 percent)
and Orange County, CA (outside
Los Angeles) (103.4 percent).
Aside from Kings and
Orange counties, those with a
population of at least 1 million where major ownership expenses
typically consumed more than 28 percent of average local wages in
the second quarter of 2024 included Alameda County (Oakland), CA (86.7 percent required);
Queens County, NY (78.5 percent)
and San Diego County, CA (77.2
percent).
Counties where the smallest portion of average local wages were
required to afford the median-priced home during the second quarter
of this year were Cambria County, PA (east of Pittsburgh) (12 percent of annualized weekly
wages needed to buy a home); Macon
County (Decatur), IL (13.3
percent); Peoria County, IL (14.6
percent); Schuylkill County, PA
(outside Allentown) (14.6 percent)
and Mercer County, PA (north of
Pittsburgh) (15.2 percent).
Wage needed to afford typical home 25 percent more
than U.S. average
Major home ownership expenses on
typical homes sold in the second quarter of 2024 required an annual
income of $90,598 to be affordable,
which was 25.2 percent more than the latest average national wage
of $72,358.
Annual wages of more than $75,000
were needed to pay for major costs on median-priced homes purchased
during the second quarter of 2024 in 343, or 58.2 percent, of the
589 markets in the report. That posed major obstacles as average
wages exceed that amount in just 11.9 percent of the counties
reviewed.
The 20 largest annual wages required to afford typical homes
remained on the east or west coasts, led by San Mateo County,
CA ($418,928); New York County (Manhattan), NY ($407,393); Santa Clara
County (San Jose), CA
($394,999); Marin County, CA (outside San Francisco) ($354,264) and San
Francisco County, CA ($339,981).
The lowest annual wages required to afford a median-priced home
in the second quarter of 2024 were in Cambria County, PA (east
of Pittsburgh) ($20,668); Schuylkill
County, PA (outside Allentown) ($27,277); Mercer Count, PA (north of
Pittsburgh) ($28,130); Bibb
County (Macon), GA
($31,681) and Macon County (Decatur), IL ($31,826).
Virtually every local market around U.S. remains
historically less affordable
Among the 589 counties
analyzed, 582, or 98.8 percent, were less affordable in the second
quarter of 2024 than their historic affordability averages. That
was only slightly worse than the 98.3 percent level in the first
quarter of 2024 and the 98 percent portion in the second quarter of
last year, but 17 times the 5.8 percent figure from the first
quarter of 2021. Historical indexes worsened compared to the second
quarter of last year in 92.9 percent of those counties, leaving the
nationwide index at its lowest point in 17 years.
Counties with a population of at least 1 million that were less
affordable than their historic averages (indexes of less than 100
are considered historically less affordable) included Mecklenburg County (Charlotte), NC (index of 59); Fulton County (Atlanta), GA (60); Wake County (Raleigh), NC (62); Franklin County (Columbus), OH (62) and Wayne County (Detroit), MI (63).
Among counties with a population of at least 1 million, those
where the affordability indexes worsened most from the second
quarter of 2023 to the second quarter of 2024 were Orange County, CA (outside Los Angeles) (index down 17.5 percent);
Alameda County (Oakland), CA (15.5 percent); Broward County (Fort
Lauderdale), FL (down 12.5 percent); King County (Seattle), WA (down 12.4 percent) and
Nassau County, NY (outside
New York City) (down 12.1
percent).
Just 1 percent of counties are more affordable than historic
averages
Only seven of the 589 counties in the report (1.2
percent) were more affordable than their historic averages in the
second quarter of 2024. That was slightly less than the 2 percent
level from a year earlier and far worse than the 94.2 percent
portion that were historically more affordable in the first quarter
of 2021.
Counties that were more affordable in the second quarter of this
year compared to historical averages included Macon County (Decatur), IL (index of 117); San Francisco County, CA (105); Ontario County, NY (outside Rochester) (104); Mercer County, PA (north of Pittsburgh) (102) and New York County (Manhattan), NY (102).
Report Methodology
The ATTOM U.S. Home Affordability
Index analyzed median home prices derived from publicly recorded
sales deed data collected by ATTOM and average wage data from the
U.S. Bureau of Labor Statistics in 589 U.S. counties with a
combined population of 260.7 million during the second quarter of
2024. The affordability index is based on the percentage of average
wages needed to pay for major expenses on a median-priced home with
a 30-year fixed-rate mortgage and a 20 percent down payment. Those
expenses include property taxes, home insurance, mortgage payments
and mortgage insurance. Average 30-year fixed interest rates from
the Freddie Mac Primary Mortgage Market Survey were used to
calculate monthly house payments.
The report determined affordability for average wage earners by
calculating the amount of income needed for major home-ownership
expenses on median-priced homes, assuming a loan of 80 percent of
the purchase price and a 28 percent maximum "front-end"
debt-to-income ratio. For example, affording the nationwide median
home price of $360,000 in the second
quarter of 2024 required an annual wage of $90,598. That was based on a $72,000 down payment, a $288,000 loan and monthly expenses not exceeding
the 28 percent barrier — meaning wage earners would not be spending
more than 28 percent of their pay on mortgage payments, property
taxes and insurance. That required income was more than the
$72,358 average wage nationwide,
based on the most recent average weekly wage data available from
the Bureau of Labor Statistics, making a median-priced home
nationwide unaffordable for average workers.
About ATTOM
ATTOM provides
premium property data to power products that improve
transparency, innovation, efficiency, and disruption in a
data-driven economy. ATTOM multi-sources property tax, deed,
mortgage, foreclosure, environmental risk, natural hazard,
and neighborhood data for more than 155 million U.S.
residential and commercial properties covering 99 percent of the
nation's population. A rigorous data management process involving
more than 20 steps validates, standardizes, and enhances
the real estate data collected by ATTOM, assigning each
property record with a persistent, unique ID — the ATTOM ID. The
30TB ATTOM Data Warehouse fuels innovation in many industries
including mortgage, real estate, insurance, marketing, government
and more through flexible data delivery solutions that
include ATTOM Cloud, bulk file licenses, property
data APIs, real estate market trends, property navigator
and more. Also, introducing our newest innovative solution, making
property data more readily accessible and optimized for AI
applications– AI-Ready Solutions.
Media Contact:
Megan
Hunt
megan.hunt@attomdata.com
Data and Report
Licensing:
datareports@attomdata.com
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SOURCE ATTOM