【World Property Journal】Median Home Price Not Affordable to 74 Percent of Average U.S. Wage Earners

According to ATTOM Data Solutions newly released Q2 2019 U.S. Home Affordability Report, median U.S. home prices nationwide in the second quarter of 2019 were not affordable for average wage earners in 353 of 480 U.S. counties analyzed in the report (74 percent).

The largest populated counties where a median-priced home in the second quarter of 2019 was not affordable for average wage earners included Los Angeles County, California; Cook County (Chicago), Illinois; Maricopa County (Phoenix), Arizona; San Diego County, California; and Orange County, California.

The 127 counties (26 percent of the 480 counties analyzed in the report) where a median-priced home in the second quarter of 2019 was still affordable for average wage earners included Harris County (Houston), Texas; Wayne County (Detroit), Michigan; Philadelphia County, Pennsylvania; Cuyahoga County (Cleveland), Ohio; and Franklin County (Columbus), Ohio.

The report determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments -- including mortgage, property taxes and insurance -- on a median-priced home, assuming a 3 percent down payment and a 28 percent maximum "front-end" debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics.

"Despite falling mortgage rates and rising wages, the cost of owning the typical home remains out of reach or a significant financial stretch for the nation's average wage earners," said Todd Teta, chief product office with ATTOM Data Solutions. "However, a closer look at the data reveals milder-than-usual increases for the Spring, and none as severe as in previous years since the recession. Therefore, this can help indicate the market may be easing, following similar indicators from recent home-flipping and foreclosure data trends."

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 By Monsef Rachid