The U.S. housing market remains tough for buyers as 2024 ends. ATTOM’s U.S. Home Affordability Report shows that median-priced homes are unaffordable in 98% of U.S. counties, continuing a trend that challenges average wage earners.
Key Points
- Higher Ownership Costs:some text
- Mortgage payments, property taxes, and insurance now consume 34% of the average wage, surpassing the 28% guideline.
- Median home prices rose to $364,750, up 2.1% quarterly and 11.4% annually.
- Impact of Mortgage Rates:some text
- Rates above 6% make borrowing expensive.
- Down payments now equal four times the average national wage, a significant hurdle for first-time buyers.
- Where It’s Hardest to Buy:some text
- Counties like Los Angeles (CA), Phoenix (AZ), and Miami (FL) are among the least affordable.
- More affordable markets include Chicago (IL), Houston (TX), and Detroit (MI).
- Wages vs. Prices:some text
- In 76% of counties, home prices are outpacing wage growth.
- Buyers need $89,649 annually to afford a median-priced home, 21% more than the average wage of $73,918.
Buyers Face Tough Choices
Rob Barber, CEO of ATTOM, highlights the dilemma: “The U.S. housing market generates great profits for sellers but financial stress for buyers.” Sellers benefit from high prices, but buyers in one-third of U.S. markets spend at least 43% of local wages on homeownership, a serious affordability issue.
Affordable vs. Unaffordable Regions
- Least Affordable: Counties like Santa Cruz (CA) and Brooklyn (NY) demand over 100% of wages for homeownership.
- Most Affordable: Cambria (PA) and Schuylkill (PA) counties require less than 15% of wages, offering options for budget-conscious buyers.
What This Means for You
- Investors:some text
- Rising rents create opportunities in areas where buying is out of reach for residents.
- Long-term price growth in major metros benefits property owners.
- First-Time Buyers:some text
- Explore house hacking, FHA loans, or more affordable regions.
- Focus on areas with better wage-to-price ratios for entry-level opportunities.
- Policy:some text
- The affordability gap calls for more affordable housing and first-time buyer programs.
What’s Next?
The 2025 housing market will likely remain challenging. Buyers may need to be patient or consider relocating for affordability. Staying informed and adopting creative strategies will be essential for success, whether buying, investing, or guiding clients.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
