Affordability Remains Tough During Q4
ATTOM, leader in real estate data today, released its fourth-quarter 2023 U.S. Home Affordability Report showing the average single-family homes and condos remain less affordable when comparing the prices to the historic medians of 99% of counties around the nation. The latest trend shows that home ownership has continuous risen to take most of one’s wages throughout the U.S.
It is reported that the average home consumes 33.7% of the average national salary, a level considered unaffordable by regular lending standards. Along with mortgage rates remaining higher than historical norms, property taxes and insurance rates are up 3% over 2023 and 12% from 2021, before mortgage rates went parabolic from their record lows.
Robert Barber, CEO for ATTOM, states that “owning a home remains harder than previous years and the annual Fall slowdown in the housing market has helped curb problems working against potential buyers.” ATTOM shows that 572 of 580 (98.6%) counties are less affordable in 4th quarter of 2023 then the past. These numbers leave just 8 counties (1.4%) where homes are more affordable than historic averages.
What is plaguing most areas is the gap between the average income and the average home price throughout 294 of 580 counties reported. The top counties where prices outpace wages are Los Angeles, San Diego, and Orange counties in California as well Kings County New York. Conversely, the best counties are in Texas, Arizona.
In 60% of counties, it is reported that an individual needs an annual salary of $75,000 or more to pay for the typical home. But, from the Home Affordability Report it is shown that only 11 percent of counties have an annual salary earned average of over the $75,000 needed. The actual salary requirement is closer to $86,404, 20.5% higher than that reported. Noted in our previous articles, we do not believe the economy will see home prices decrease needed in the coming months to encourage a strong buyer’s market.