Compared to historical averages, median-priced single-family homes and condos are less affordable in the first quarter of 2024 in more than 95% of counties analyzed by Attom.
The analytics firm’s first-quarter 2024 U.S. Home Affordability Report confirmed the recent pattern of homeownership requiring a significant share of wages nationwide. Moreover, per Attom’s data, major expenses on median-priced homes take up 32.2% of the average national wage — more than common lending guidelines suggest.
One silver lining: Both of those statistics have actually improved. Median homeownership costs are less affordable than in the past in 577 of the 590 counties with enough data for Attom to evaluate in the first quarter of this year. That’s a modest decrease from 584 in the fourth quarter of 2023. And the portion of wages needed for homeownership slid from 33.2% in the previous quarter, as expenses have dropped nearly 3% while wages have stayed essentially flat.
“The picture for home buyers is brightening a little again as affordability measures have improved for the second quarter in a row,” said Rob Barber, CEO for ATTOM. “For sure, it’s not like things are coming up roses for house hunters. Affording a home remains a financial stretch, or a pipe dream, for so many households. But with mortgage rates coming down and home prices growing only by modest amounts, it’s gotten a bit easier for average wage earners to afford a home so far this year.”
Working in favor of buyers is softening acceleration of the national median home price, which has climbed less than 2% quarterly and remains down from last year’s peaks. Still, as Barber alluded to, affordability remains a major challenge: The number of counties where homeownership is less affordable than it has been is still high, and up by 28 counties since the first quarter of last year. It’s also up by more than 10 times since early 2021.
Meanwhile, the portion of average local wages consumed by major homeownership expenses is also up from 29.6% since the first quarter of 2023. It’s also substantially above the recent low of 21.3% from the first quarter of 2021, since gains in earnings have consistently lagged behind increases in homebuying expenses in the past four years.
