August 4, 2022
  • August 4, 2022

Report: Homes deemed unaffordable in most US counties

By on July 21, 2022 0

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The combination of rapidly rising mortgage rates and double-digit increases in home prices has resulted in an easily predictable consequence in the second quarter of 2022: the median home is less affordable for median earners in 97% of state counties. States compared to historical averages. .

This compares to 69% of counties that were historically less affordable in the second quarter of 2021, according to ATTOM’s latest Housing Affordability Reporta real estate data company, and is the highest point since 2007, just before the housing market crash and the Great Recession.

ATTOM analyzes average salaries and the mortgage, property taxes and insurance required for a median-priced single-family home in each county to determine affordability. Analysts assume buyers would put down a 20% down payment and spend a maximum of 28% of their gross monthly income on their housing payment.

However, the typical down payment for first-time buyers is between 6 and 7 percent, according to the National Association of Realtors. For repeat buyers, the typical down payment is 17%. A lower down payment would force buyers to borrow more money, which would make their monthly housing payments even higher and therefore less affordable.

Compared to historical levels, median home prices in 560 of the 575 counties analyzed in the second quarter of 2022 are less affordable than in the past for average earners in those counties. In other words, buying a house would consume a higher percentage of the average salary than in the past.

In addition to comparing housing costs to historical averages, ATTOM researchers found that the median home is unaffordable for average earners in 67% of counties. Largest counties by population where homes are unaffordable, meaning costs would require more than 28% of the average buyer’s gross monthly income, include Los Angeles, Maricopa (Phoenix), San Diego, Orange (outside of Los Angeles) and Kings County (Brooklyn).

The biggest among the 187 counties where median-priced homes remain affordable for the average local worker are Cook (Chicago), Harris (Houston), Philadelphia, Franklin (Columbus, Ohio), and Hennepin (Minneapolis).

Annual salaries of more than $75,000 are needed to pay the median house price in 40% of the markets in ATTOM’s report. As is often the case, the 20 counties that require the highest annual salaries are found in coastal areas, primarily in California. The top two counties with the highest income needed to buy a home are New York (Manhattan), where an annual income of $362,691 is required to buy the typical home; and San Mateo outside of San Francisco, where an annual income of $357,567 is required. In the District of Columbia, an annual income of $112,099 is needed to buy a home at the median price.

Counties with the lowest required wages to afford a median-priced home include Schuylkill (outside of Allentown, Pennsylvania), where you need $17,595 to buy; Cambria (outside Pittsburgh), which requires an annual income of $20,171; Mercer (outside Pittsburgh), which requires income of $23,255; Fayette County (outside Pittsburgh), which requires income of $23,638; and Bibb (Macon, Ga.), which requires an income of $24,501.

For the full report, Click here.