ATTOM today released its second-quarter 2024 U.S. Home Affordability Report, which revealed that median-priced single-family homes and condos remained less affordable in the second quarter of 2024 compared to historical averages in 99% of counties around the nation.
The latest trend continued a pattern dating back to early 2022, of home ownership requiring historically large portions of wages around the country amid ongoing high residential mortgage rates and elevated home prices. Major expenses on median-priced homes consumed 35.1% of the average national wage in the second quarter – marking the highest point since 2007 and standing well above the common 28% lending guideline.
The national median home price reached a record $360,000 in the spring, with mortgage rates around 7%, causing homeownership costs to rise faster than wages. Consequently, the percentage of wages needed for mortgage payments, property taxes, and insurance increased by about three percentage points from both the previous quarter and the same quarter last year.
“The latest affordability data presents a clear challenge for home buyers. While home prices are increasing and mortgage rates remain relatively high, these factors are making homes less affordable,” said Rob Barber, CEO of ATTOM. “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.”
From April to June, the national median home price rose 7.3% quarterly and 4.7% annually. Average 30-year mortgage rates ended the quarter at about 6.9%, more than double the 2021 rates, further burdening buyers.
Median home ownership costs in 582 of 589 counties (with enough data to analyze) were less affordable than historical levels, up from 579 in the first quarter and 577 a year ago, a significant increase from early 2021. About 80% of counties had home ownership expenses deemed unaffordable based on the 28% guideline, including Los Angeles County, Calif., Cook County (Chicago), Ill., and Maricopa County (Phoenix), Ariz.
The national median price for single-family homes and condos reached $360,000 in the second quarter of 2024, up from $335,500 in the first quarter and $344,000 a year earlier. Median home prices rose in 514 of the 589 counties quarterly and in 441 annually. The largest year-over-year increases were in Orange County, CA (16.2%), Alameda County, CA (12%), and King County, WA (11.3%).
In 293 of the 589 counties, home prices outpaced wage increases, worsening affordability due to high interest rates and rising property taxes. Major expenses on median-priced homes consumed a higher portion of wages in 547 counties from the first to the second quarter of 2024 and in 92.4% of counties compared to a year earlier.
Nationwide, the typical cost of mortgage payments, homeowner insurance, mortgage insurance, and property taxes reached $2,114, consuming 35.1% of the average annual wage of $72,358, up from 31.9% in the first quarter and 32.1% a year ago. In over a third of the markets, these expenses consumed at least 43% of average local wages, a seriously unaffordable benchmark.
Affordability declines hit upscale markets in the West and Northeast with median prices of at least $450,000. Major home ownership expenses required an annual income of $90,598, 25.2% more than the average national wage. In 343 of the 589 counties, annual wages over $75,000 were needed, a major obstacle as average wages exceeded this amount in only 11.9% of counties.
More details from the report can be found here.
