【World Property Journal】Median Home Prices Not Affordable to Average U.S. Wage Earner in 2019

According to ATTOM Data Solutions fourth-quarter 2019 U.S. Home Affordability Report, the median home prices in the fourth quarter of 2019 were unaffordable for average wage earners in 344 of 486, or 71 percent of the U.S. counties analyzed in the report. That figure was down from 73 percent in third quarter and 75 percent from a year earlier.

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 (see full methodology below).

"Home prices rose across the country by 9 percent year-over-year in the fourth quarter of 2019, and the typical home remained a financial stretch for average wage earners. However, homes were actually a bit more affordable because of declining mortgage rates combined with rising pay to overcome the continued price run-up," said Todd Teta, chief product officer with ATTOM Data Solutions. "As long as people are earning more money and shelling out less to pay off home loans, the market should remain strong with prices continuing to rise, at least in the near term. Those are big ifs, but for now this report offers some decent findings for both home seekers and home sellers."
 

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