GETTY IMAGES
Want to buy a home? These days you’ll likely need to make more than an average salary to afford the monthly payments.
A new report from property data firm Attom Data Solutions analyzed how affordable it is to be a homeowner across the country. Owning a home was affordable in 41% of counties nationwide as of the fourth quarter of 2020. The largest metropolitan areas where owning a home is still affordable for the average household include Chicago, Houston, Philadelphia, Cleveland and Tampa, Fla.
To produce the report, researchers looked at the median home prices and average wage data across 499 counties nationwide. They calculated the cost of major homeownership expenses—mortgage payments, taxes and insurance—for median-priced homes, assuming that there was a $100,000 loan in place.
Then, researchers compared those amounts to the average weekly wages for households with two wage earners. In cases where the housing costs exceeded 28% of the average household’s income, the market was deemed to be unaffordable.
“Owning a home in the United States slipped into the unaffordable zone for average workers across the nation in the fourth quarter as the numbers continued a year-long slide in the wrong direction,” Todd Teta, chief product officer with Attom Data Solutions, said in the report.
The report found that momentum is moving in the wrong direction for most Americans—in short, it’s getting more expensive to own a home. Researchers found that owning a home was less affordable than the historical average across 55% of the 499 counties analyzed. That is up from 43% of these counties last year and 33% three years ago.
Areas that are now less affordable than they were historically include multiple parts of Texas (Dallas-Ft. Worth and Austin), the suburbs of Detroit and Philadelphia.
Rising home prices are the driving force behind worsening affordability. Home prices were up at least 10% for more than three-quarters of the counties studied. And across 90% of housing markets nationwide, price appreciation is outpacing wage growth.
“Home prices have continued rising throughout 2020 and the housing market has remained remarkably resilient in the face of the brutal economic fallout from the coronavirus pandemic,” Teta said. “The future remains wholly uncertain and affordability could swing back into positive territory. But for now, things are going in the wrong direction for buyers.”
The post The Average Family Can’t Afford To Own a Home in Most U.S. Counties, Study Finds appeared first on Real Estate News & Insights | realtor.com®.
Real Estate News & Insights | realtor.com®News – Real Estate News & Insights | realtor.com® Read More