In what I’m sure was a surprise to no one, housing affordability for workers across the U.S. declined in Q2 of 2020, according to the latest data from ATTOM Data Solutions. (ATTOM)
- In 347 of the 569 counties analyzed (61%) median home prices of single-family homes and condos in the second quarter of this year are less affordable than historical averages.
- This is up from 275 counties (48%) that we saw in the second quarter of 2020.
As home prices climb, this has resulted in ownership costs on the typical home rising as well.
- Major ownership costs on the typical home now consumer 25.2% of the average national wage of $63,986.
- This is up from the 22.7% in Q1 2021 and is up from the 22.2% we saw in the second quarter of last year.
The good news is that a majority (56%) of markets still require less than 28 percent of wages to buy a home…
Todd Teta, chief product officer with ATTOM said that low rates are helping, but the future is uncertain. “While super-low mortgage rates have certainly helped in a big way, prices have simply shot up too much to maintain historic affordability levels. The near future of affordability remains very uncertain, as it has throughout the pandemic
Housing is like everything else in the economy. There is a yin and there is a yang. When home prices go up it is great for homeowners. However, home prices jumping up is not so great for wannabe homeowners. As Teta mentioned above, low rates are helping to blunt the cost of rising home prices. Unfortunately, as Freddie Mac reported this week, mortgage rates are rising which is going to raise borrowing costs which could price some out of the market.