HOUSING MARKET TROUBLE AS 582 US COUNTIES NOW UNAFFORDABLE
The U.S. housing market has become more unaffordable in the second quarter of the year, with 98.9 percent of all counties around the nation analyzed by real estate analytics firm ATTOM for a new study now less affordable than their historic affordability average.
Read more: How to Calculate How Much House You Can Afford
According to the company's second-quarter 2024 U.S. Home Affordability Report, median home ownership costs have increased in 582 of the 589 counties it analyzed, compared to historical levels.
That was up from 579 in the first quarter of the year and 577 in the second quarter of 2023. Compared to early 2021, the share of unaffordable counties was more than 15 times higher between April and June.
This means that in nearly 99 percent of counties across the U.S., Americans now need to spend a larger portion of their salaries on homeownership, as mortgage rates remain high and home prices are still on the rise on a year-on-year basis, despite the correction of late summer 2022 to spring 2023. Just 1 percent of counties were more affordable than historic averages—seven out of 589.
Read more: How to Qualify for an Affordable Mortgage
According to ATTOM, the average homeowner with a typical annual income of $72,358 spent $2,144 a month on housing costs—approximately 35 percent of their salary. Financial experts normally advise homeowners not to spend more than 28 percent of their wages on housing expenses.
In more than a third of the counties analyzed by the company, homeowners were spending at least 43 percent of the average local wage—"a benchmark considered seriously unaffordable," the ATTOM report reads.
Read more: How to Buy a House When You Have Bad Credit
The worst markets were concentrated in the West and Northeast. Counties with the largest populations that were unaffordable between April and June were Los Angeles County, California; Cook County, Illinois; Maricopa County, Arizona; San Diego County, California; and Orange County, California.
The report determined whether a county was or not affordable for average wage earners by calculating the amount of income needed for major home-ownership expenses on median-priced homes, assuming a loan of 80 percent of the purchase price and a 28 percent maximum front-end, debt-to-income ratio.
Newsweek contacted ATTOM for comment by email on Thursday morning.
As of July 3, the 30-year fixed-rate mortgage rate was 6.95 percent, according to Freddie Mac. The 15-year fixed-rate mortgage was 6.25 percent as of the same date. In May, the latest data available on Redfin showed that the median sale price of a home in the U.S. was $438,483, up 4.8 percent year-over-year.
ATTOM reports that the median price for single-family homes and condos in the U.S. climbed to $360,000 in the second quarter of the year, $15,000 higher than the previous peak of $345,000 that was hit in the spring of 2022. It was also up from the previous quarter, when it was $335,500.
Median home prices also shot up between the first and second quarter in 514 of the 589 counties analyzed by ATTOM. All counties analyzed had a population of at least 100,000 and at least 50 single-family home and condo sales in the second quarter of 2024.
"The latest affordability data presents a clear challenge for home buyers," said Rob Barber, CEO for ATTOM, in a press release. "While home prices are increasing and mortgage rates remain relatively high, these factors are making homes less affordable," he added.
"It's common for these trends to intensify during the spring buying season when buyer demand increases. However, the trends this year are particularly challenging for house-hunters, more so than at any point since the housing market boom began in 2012. As the 2024 buying season progresses into the summer, we will continue to monitor the data closely."
2024-07-04T12:54:11Z dg43tfdfdgfd
