While sky-high price tags for homes have been a boon for sellers in 2021, recent data by ATTOM Solutions suggests that buyers have felt a record-level strain in terms of affordability.
The organization released its fourth-quarter 2021 U.S. Home Affordability Report on Dec. 30, showing that median-priced, single-family homes in three-quarters of U.S. markets were historically less affordable during Q4 this year—up from 39% of markets in 2020.
While median-priced homes are still within the financial means of average workers across the nation in the fourth quarter of 2021, the report found that the number of markets that saw affordability decline lower than historical averages hit a 13-year high.
The breakdown:
– Median home prices in 440 of the 575 counties examined in the fourth quarter of 2021 are less affordable than past averages historically.
– The drop in affordability is partially due to the median national home price surging 17% over the past year to a record high of $317,500.
– Home-price appreciation outpaced weekly wage growth in the fourth quarter of 2021 in roughly 80% of analyzed markets.
– Homeownership costs on median-priced homes consume less than 28% of average local wages in half the nation in the fourth quarter of 2021.
– One in five counties requires an annual wage of more than $75,000 to afford a median-priced home.
What it means:
“The average wage earner can still afford the typical home across the United States, but the financial comfort zone continues shrinking as home prices keep soaring and mortgage rates tick upward.
“Historically low rates and rising wages are still big reasons why workers can meet or come very close to standard lending benchmarks in a majority of counties we analyze. But the portion of wages required for major ownership expenses nationwide is getting closer to levels where banks become less likely to offer home loans. Amid very uncertain times, with the pandemic again threatening the economy, we will keep watching this key measure of housing market stability.” — Todd Teta, Chief Product Officer, ATTOM-
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
