Report: Homes Became Less Affordable in Q1 2019

April 1, 2019

Median home prices in the first quarter of 2019 were not affordable to people making the average wage in 71 percent of U.S. counties, according to ATTOM Data Solutions’ Q1 2019 U.S. Home Affordability Report. Researchers calculated the amount of income needed to make a monthly house payment—including mortgage, property taxes, and insurance—on a median-priced home, assuming a 3 percent down payment.

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“We are seeing a housing market in flux across the United States, with a mix of tailwinds and headwinds that are pricing many people out of the housing market but also are creating potentially better conditions for buyers,” says Todd Teta, ATTOM Data Solutions’ chief product officer. “Continually rising home prices in many areas do remain a financial stretch—or simply unaffordable—for a majority of households. However, quarterly wage gains have been outpacing price increases for more than a year, and mortgage rates are falling, which have helped make homes a bit more affordable now than they’ve been in a year.”

Teta predicts that affordability could improve in the coming months, particularly since many consumers have been priced out of the market. “Prices need to moderate down in order to attract buyers,” he says. “The economy could slow, and interest rates could go back up, but the signs point to the possibility of an impending buyers’ market.”

Forty-nine percent of markets were less affordable than their historic averages in the first quarter of 2019, according to ATTOM Data Solutions’ report. While that is still elevated, it is down from 76 percent in the previous quarter. Some of the markets seeing decreasing affordability over the past year include Los Angeles County, Calif.; Harris County, Texas; Maricopa County, Ariz.; San Diego County, Calif.; and Riverside County, Calif.

Overall, the average wage earner would need to spend 32.7 percent of their income to buy a median-priced home in the first quarter of 2019. The average earner would need to spend the highest share of their income to buy a median-priced home in King County (Brooklyn), N.Y. (115.9%); New York County (Manhattan), N.Y. (115%); Santa Cruz County, Calif. (114.1%); Marin County, Calif. (103.1%); and Maui County, Hawaii (100.7%).

Still, the affordability picture is improving in many markets. Fifty-one percent of the 473 counties analyzed for the report were more affordable than their historic affordability averages in the first quarter of 2019, according to the report. Some of those places include Cook County, Ill.; Miami-Dade County, Fla.; Santa Clara, Calif.; Middlesex, Mass.; and Suffolk County, N.Y.