Home price appreciation continues to outpace wage growth: Attom
Rising home prices are likely to constrain affordability for some time to come, with only the current low mortgage interest rate environment softening the blow, Attom Data Solutions said.
In Attom's third-quarter Home Affordability Report, a median priced home was not affordable for average wage earners in 74% of the 498 counties it analyzed. That was unchanged from the second quarter
"Buying a home continues to be a rough road to navigate for the average wage earner in the United States," Todd Teta, chief product officer with Attom Data Solutions, said in a press release. "Prices are going up substantially faster than earnings in 2019 without any immediate end in sight, which continues to make homeownership difficult or impossible for a majority of single-income households and even for many families with two incomes."
"If there is any silver lining to the picture, it's that mortgage rates have fallen back to historic lows. That's softening the blow of rising prices and actually making homeownership a bit more attainable in most areas of the country," he continued.
Still, home price appreciation outpaced increases in average weekly wages in 379 (76%) of the counties Attom looked at, including Westchester County, N.Y., a suburb of New York City; Los Angeles County, Calif., which also includes the suburbs surrounding the city; Suffolk County, Mass., which is Boston and its suburbs; Arlington County, Va., a suburb of Washington, D.C.; and Monterey County, Calif.
At the other end of the spectrum, wage growth outpaced home price appreciation in San Diego County, Calif.; Orange County, Calif., which also includes Los Angeles suburbs; Miami-Dade County, Fla.; and the New York City boroughs of Brooklyn (Kings County) and Queens.
Yet, Brooklyn was at the top of another list — the counties that required the greatest percentage of annualized weekly wages to buy a home — at 110.4%. That was followed by Santa Cruz County, Calif., 105%; Marin County, part of the Bay Area, 102.4%; the island of Maui in Hawaii, 87.9%; and Monterey County, 87.5%.
All told, two-thirds of the counties analyzed required at least 30% of annualized weekly wages to buy a home there in the third quarter.
Meanwhile, fewer counties are now less affordable than their historic average, Attom pointed out, with 61% in the third quarter, down from 70% in the second quarter and 73% in the third quarter of 2018.