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Homeownership Less Affordable in More Than Three-Quarters of U.S. Counties

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An inventory shortage, coupled with low mortgage rates and lightning-quick turnarounds on sales, drove a hot housing market in 2021 — and 2022 shows little sign of a slowdown.

According to a recent report from ATTOM — a nationwide property database based in Irvine, Calif. — median-priced single-family homes in more than three-quarters (77%) of U.S. counties with available data were less unaffordable in the fourth quarter of 2021 than historical averages. This is a jump of nearly 100% from the 39% of U.S. counties a year prior in the fourth quarter of 2020.

Median U.S. home prices have spiked 17% over the past year, up to a record $317,500.

Where homes are least affordable compared to historical averages

Overall, ATTOM analyzed 575 U.S counties for which enough data was available, and found that homes in 440 of these U.S. counties — 77% — were less affordable in the fourth quarter of 2021 than historical averages.

Here are the counties where homes were least affordable in the fourth quarter of 2021, based on the ATTOM U.S. Home Affordability Index:

  • Rankin County, Miss.
  • Canyon County, Idaho
  • Rutherford County, Tenn.
  • Gaston County, N.C.
  • Wayne County, Ohio

Here’s where homes were least affordable in counties with at least 1 million residents:

  • Tarrant County, Texas
  • Maricopa County, Ariz.
  • Mecklenburg County, N.C.
  • Hillsborough County, Fla.
  • Clark County, Nev.

Where homes are most affordable compared to historical averages

With only 23% — or 135 — of U.S. counties deemed more affordable than historical averages, where can such a home be found?

Here are the counties where homes were most affordable in the fourth quarter of 2021 compared to historical averages, based on the ATTOM index:

  • Macon County, Ill.
  • Schuylkill County, Pa.
  • San Francisco County, Calif.
  • Peoria County, Ill.
  • Columbiana County, Ohio

And here’s the most-affordable list — again, compared to historical averages — when only including counties with a population of at least 1 million:

  • New York County, N.Y.
  • Montgomery Country, Md.
  • Cook County, Ill.
  • Santa Clara County, Calif.
  • Fairfax County, Va.

1 in 5 counties require $75,000-plus in annual wages for a typical home

Residents need annual wages of more than $75,000 to cover major costs — think mortgage, property taxes and insurance — on a median-priced home in 114 of the 575 markets analyzed, or 20%.

The U.S. counties with the highest annual wages needed to afford a median-priced home were on the coasts:

  • New York County, N.Y. — $274,679
  • San Mateo County, Calif. — $252,589
  • San Francisco County, Calif. — $251,054
  • Santa Clara County, Calif. — $229,301
  • Marin County, Calif. — $223,713

On the other side of the spectrum, the counties with the lowest annual wages needed to afford a typical home in the U.S. were:

  • Schuylkill County, Pa. — $10,927
  • Bibb County, Ga. — $16,483
  • Cambria County, Pa. — $17,784
  • Macon County, Ill. — $19,317
  • Blair County, Pa. — $20,363

Housing prices surpass wage growth in nearly 80% of counties

A somber truth: In the fourth quarter of 2021, home price appreciation was greater than weekly wage growth in 78% of the 575 counties analyzed (447 in total). It was largest in:

  • Harris County, Texas
  • Maricopa County, Ariz.
  • San Diego County, Calif.
  • Orange County, Calif.
  • Miami-Dade County, Fla.

On the flip side, these are some of the counties where wage growth outpriced home price appreciation:

  • Los Angeles County, Calif.
  • Cook County, Ill.
  • Dallas County, Texas
  • Kings County, N.Y.
  • King County, Wash.

If you’re in the market to buy a home, seek a mortgage preapproval to get a snapshot of what you may be able to afford. Make sure to research average home prices in areas of interest.

You can use a home loan calculator to gauge how much home you can reasonably afford based on your wages and financial situation, as well as what your monthly mortgage payments would be. Beyond the major expenses cited earlier, you’ll want to factor in savings for regular maintenance, emergency repairs and more.

Methodology: Affordability was calculated for average wage earners by looking at the amount of income needed to cover major homeownership expenses (i.e., mortgage, property taxes and insurance) on a median-priced single-family home.

This assumed a 30-year fixed mortgage, a 20% down payment and a 28% maximum “front-end” debt-to-income ratio. Required income was compared to U.S. Bureau of Labor Statistics (BLS) annualized average weekly wage data. Data was pulled from 575 counties in which enough data was available.

 

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