ATTOM, a property information and analytics provider, today released its first-quarter 2022 U.S. home affordability report, showing that median-priced single-family homes were less affordable in the first quarter compared to historical averages in 79% of counties across the nation with enough data to analyze.
That data was up from just 38% of counties that were historically less affordable in the first quarter of 2021, to the highest point since mid-2008, as home prices continued rising faster than wages in much of the country.
The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly homeowner expenses — including mortgage, property taxes and insurance — on a median-priced single-family home, assuming a 20% down payment and a 28% 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.
“It’s certainly no surprise that affordability is more challenging today for prospective home buyers than it was a year ago,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Historically low mortgage rates and higher wages helped offset rising home prices over the past few years, but as home prices continue to soar and interest rates approach 5% on a 30-year fixed rate loan, more consumers are going to struggle to find a property they can comfortably afford.”
Compared to historical levels, median home prices in 461 of the 586 counties analyzed in the first quarter of 2022 were less affordable than in the past. The latest number was up from 449 of the same group of counties in the fourth quarter of 2021 and 224 in the first quarter of 2021. That increase continued as the median national home price spiked 16%, year over year, to a record high of $320,000 while average wages across the country rose just 7%.
