Housing Affordability Continues to Remain a Challenge for Many Buyers

By: Kelly Leighton on  in 

For the second quarter of 2021, median home prices of single-family homes are less affordable than historic averages in nearly two-thirds (61%) of counties in the U.S.

This is an increase of 13% year to year, and the highest point in two years, according to ATTOM Data Solutions’ 2021 U.S. Home Affordability Report. Affordability is determined by calculating the amount of income needed to meet monthly home ownership expenses, including mortgage, property taxes and insurance, on a median-priced single-family home (assuming a 20% down payment). Of 569 counties analyzed, 347 are less affordable than in the past. This comes as NAR announced that the median home price topped $350,000 for the first time in May.

The average national wage is $63,986, which means homeowners are spending 25.2% of their income on typical homeownership expenses, which is up from 22.7% last quarter and rose 3% year to year. The report noted that spending up to 28% is typically the highest point for lenders.

Thankfully, several counties in Pennsylvania were noted for their affordability. In Schuylkill County, 5.5% of annualized weekly wages are needed to buy a home, assuming the buyer makes an average wage. To afford a median-priced home in Schuylkill County, a person needs an annual wage of $9,055. In Cambria County, only 8.2% of annualized weekly wages are needed to buy a home and a buyer needs an annual salary of $12,688 to afford a median-priced home. Philadelphia was named one of the most affordable larger counties, homeownership expenses there cost 18.1% of wages on average.

Home appreciation rates are rising too, and in most cases, they are increasing quicker than wage growth. In nearly 72% of counties, home appreciation grew at a faster rate than wage growth. A yearly salary of more than $75,000 is needed in 18% of markets to purchase a median-priced home.

However, 39% of markets are more affordable than they have been in the past.