ATTOM Data Solutions' first-quarter 2021 U.S. Home Affordability Report showed that homes and condos in the first quarter were more affordable than historical averages in 52% of counties where enough data exists. According to ATTOM, this is down from 53% of counties in the first quarter of 2020 and 95% during the same period five years ago.
The company reported that despite these numbers, rising wages and falling mortgage rates compensated for a close to 20% spike in home prices over the last year, which kept median home prices affordable for average wage workers across the country.
"The past year certainly has been an odd one for the U.S. housing market. Home prices surged at a remarkable pace even as the virus pandemic damaged the U.S. economy, which dropped historical affordability levels. But average workers untarnished by the pandemic were still able to afford the typical home because wages and rock-bottom interest rates worked to their favor in a big way," said Todd Teta, chief product officer with ATTOM Data Solutions. "Much remains uncertain about the housing market in 2021. A lot will depend on how well the broader U.S. economy recovers from the pandemic and whether there are still many more buyers looking to escape congested neighborhoods most prone to the virus, pushing prices even higher. But for now, our data shows that average workers are able to manage the costs associated with rising values."
Compared to historical levels, median home prices in 287 of the 552 counties analyzed in the first quarter of 2021 were more affordable than past averages, according to ATTOM. That was down from 349 in the first quarter of 2020, a trend that came during a 12-month period when the national median home price shot up 18%, to $278,000, in the first quarter of 2021.
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