Median home prices remain unaffordable for most.
According to a new report from ATTOM Data Solutions, median home prices in the fourth quarter of 2019 were classified as unaffordable for the average wage earner in 71% of the U.S. counties analyzed.
However, in Q3, that figure was 73%. A year ago, it was 75%.
The slight decline in the number of unaffordable counties was due, in part, to the year’s drop in mortgage rates.
“Home prices rose across the country by 9% year over year in the fourth quarter of 2019, and the typical home remained a financial stretch for average wage earners,” said Todd Teta, chief product officer with ATTOM Data Solutions. “However, homes were actually a bit more affordable because of declining mortgage rates combined with rising pay to overcome the continued price run-up.”
Meanwhile, 64% of the counties required at least 30% of consumers’ annualized weekly wages to buy a home as of Q4.
Consequently, 36% of the counties required less than 30% of annualized weekly wages to purchase a home.
Historically, 53% of the counties were found more affordable than previous affordability averages in Q4. In Q3, that figure was 48%.
On the unaffordable side, 47% of counties were less affordable than their historic affordability averages in Q4, down from 52% of counties in Q3 and 71% of counties in Q4 of 2018.
“As long as people are earning more money and shelling out less to pay off home loans, the market should remain strong with prices continuing to rise, at least in the near term,” Teta said. “Those are big ifs, but for now this report offers some decent findings for both home seekers and home sellers.”