Affordability Improves, but Average Workers Still Struggle to Afford a Home
Median-priced single-family homes and condos continued to be less affordable during Q1 2024 compared with historical averages in more than 95% of U.S. counties that have sufficient data to analyze, according to a recent 2024 U.S. Home Affordability Report from real estate data curation company, ATTOM.
The report also shows that 32.3% of the average national wage during Q1 went toward major expenses on median-priced homes, which is several points above common lending guidelines. While that's also a slight quarterly improvement, it's still worse than a year ago and remains at a level that makes homeownership a struggle for many as increases in home prices and major homeownership expenses have outpaced wage gains.
As a result, the portion of average wages nationwide required for typical mortgage payments, property taxes and insurance remains up almost three percentage points from a year ago and 11 points from early in 2021, right before home-mortgage rates began shooting up from their lowest levels in decades. The latest expense-to-wage ratio continues to sit above the 28 percent level preferred by mortgage lenders and marks one the highest points over the past decade.
“The picture for home buyers is brightening a little again as affordability measures have improved for the second quarter in a row,” said Rob Barber, CEO for ATTOM. “For sure, it’s not like things are coming up roses for house hunters. Affording a home remains a financial stretch, or a pipe dream, for so many households. But with mortgage rates coming down and home prices growing only by modest amounts, it’s gotten a bit easier for average wage earners to afford a home so far this year. The upcoming Spring buying season will say a lot about whether home prices remain stable enough for this trend to continue.”