Homeownership Affordability Remains an Issue for Most Areas

Housing remains unaffordable in the majority of the U.S., but a slightly cooling market may provide opportunity for homebuyers.

According to ATTOM, median-priced homes and condos continue to be unaffordable in 99% of counties in the third quarter of this year, up 30% year over year and up 49% compared to the third quarter of 2020. Yet, the amount of average weekly wages to afford a median-priced home, along with the associated expenses, dropped from 30.9% to 30%, the first drop in nearly two years. However, this is still above the 28% cap that most lenders use with mortgages, and it’s 6.6% higher than the third quarter of 2021. In 69% of counties across the country, homeownership and its’ associated expenses are above the 28% line.

Pennsylvania offers some of the most affordable areas in the country to be a homeowner. In Schuylkill County, a homebuyer only needed 10.5% of weekly wages to afford a home, the lowest in the country. Philadelphia and the Pittsburgh area also required some of the lowest for counties with a population of 1 million or more. In Philadelphia County, buyers needed to use 18.3% of weekly wages, while in Allegheny County, buyers needed 21% of weekly wages to afford a median-priced home.

Wage growth has not increased as fast as home prices, with wages rising just 6%, compared to home prices increasing 10% over the past year. Median home prices are up 10% year over year in 52% of counties, but value has dropped in 40% of them as home prices start to drop. Philadelphia was one county named in which prices have remained stable year over year, as opposed to rising. Home prices rose faster than wages in 84% of counties.