Home prices surging has been squeezing housing affordability. Seventy-five percent of the U.S. counties recently analyzed had less affordable median-priced single-family homes in the third quarter compared to their historical averages, according to ATTOM Data Solutions, a real estate data firm.
Home prices are rising faster than wages in most of the country. Record low mortgage rates have helped home buyers offset some of these higher prices.
Major ownership costs on the typical home accounted for nearly 25% of the average national wage of $64,857 in the third quarter, according to the study. ATTOM’s report factors housing affordability for average wage earners by calculating the amount of income needed to meet monthly homeownership expenses, including mortgage, property taxes, and insurance on a median-priced home. It assumes a 20% down payment and a 28% maximum debt-to-income ratio.
Still, while housing affordability has been stretched, major homeownership expenses on a typical home are still affordable to average local wage earners in 53% of the counties analyzed, according to the report.
On the other hand, the following markets are where the highest annual wages are needed to afford a median-priced home.
