Housing affordability worsened in 98% of the US last quarter, data shows
Jennifer Sor
Jul 5, 2023, 9:20 AM EDT
- Housing affordability got worse in 98% of US counties last quarter, per data from the analytics firm ATTOM.
- The price for a median single-family home rose 10% from the first quarter to the second quarter to $350,000.
- Meanwhile, the ratio of wages to homeownership expenses rose to 33%, the highest level since 2007.
Housing affordability got worse last quarter in the wake of higher home prices, according to data from the real estate analytics firm ATTOM.
US housing costs rose above their historical average in 98% of US counties last quarter, the research group said in a report last week, with the price for a median single-family home rising 10% from the first quarter to the second quarter to $350,000.
That price is also 2% above last year’s peak, ATTOM said, before the surge mortgage rates stalled the housing market.
The ratio of average wages to homeownership expenses, meanwhile, s--t up to 33% in the second quarter. That’s the highest since 2007, reflecting one of the most unaffordable housing market the US has faced in decades.
“The US housing market has done an about-face following a downturn that threatened to usher in an extended period of flat or falling prices. With that has come another blow to how much house the average worker around the country can afford,” ATTOM CEO Rob Barber said in a statement. “Whether this is just a temporary blip amid this year’s peak buying season or a sign of another extended price surge is anyone’s guess.”
While mortgage rates have retreated from highs of 7% reached earlier, they remain elevated and have discouraged existing homeowners from listing their properties for sale, preventing the significant price declines experts anticipated in 2022.
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That means affordability isn’t going to improve until mortgage rates dial back, which is unlikely to happen anytime soon, experts told Insider. The average rate on the 30-year fixed mortgage clocked in at 6.71% this week, sticking close to a 20-year-record.
Experts have said rates need to drop to the 5% range in order for more inventory to hit the market and sales activity to improve. But by the end of this year, Redfin has predicted they will be at 6%.
Source: Markets Insider
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