Median-priced single-family homes are less affordable in the third quarter compared to historical averages in 75% of counties across the nation, according to the third-quarter 2021 U.S. Home Affordability Report from ATTOM.
That is up from 56% of counties in the third quarter of 2020, to the highest point in 13 years, as home prices have increased faster than wages in much of the country.
“The typical median-priced home around the U.S. remains affordable to workers earning an average wage, despite prices that keep going through the roof. Super-low interests and rising pay continue to be the main reasons why,” said Todd Teta, chief product officer with ATTOM. “But affordability keeps inching in the wrong direction as the housing market boom keeps roaring ahead. That’s pushing average workers closer and closer to the point where lenders might be reluctant to give them a mortgage. With much still uncertain about how the pandemic and many other forces could still affect the economy, affordability remains a crucial measure of market stability that could easily keep going in the same direction or swing back the other way.”
Compared to historical levels, median home prices in 430 of the 572 counties analyzed in the third quarter of 2021 are less affordable than past averages.
The latest number is up from 317 of the same group of counties in the third quarter of 2020 – a downturn that developed as the median national home price shot up 18% to a record high of $315,500.
While major ownership costs on median-priced homes do remain within the financial means of average workers across the nation in the third quarter of 2021, the percentage of counties where affordability is worse than historical averages has hit its highest point since the third quarter of 2008.
Those mixed patterns in the third quarter have followed similar trends from earlier in 2021 as the U.S. housing market continues booming despite damage to large segments of the U.S. economy caused by the Coronavirus pandemic that struck in early 2020.