ATTOM has released its Q1 2025 U.S. Home Affordability Report showing that median-priced single-family homes and condos remain less affordable in Q1 of 2025 compared to historical averages in 97% of counties around the nation with enough data to analyze. The latest trend extends a three-year pattern of homeownership requiring historically large portions of wages as U.S. home prices stay at or near record levels.
The report also shows that major expenses on median-priced homes currently consume 32% of the average national wage. That level is virtually the same as in Q4 of last year although it is about one percentage point up from a year ago, keeping the figure above the common 28% lending guideline preferred by lenders.
The current and historic affordability levels represent the latest measures of how home ownership remains a financial stretch for average workers around the nation. It comes as the national median home price has dipped slightly this quarter, to $351,000, during the typically slow Winter homebuying season. But with home mortgages rates still near 7%, the drop-off is too small to push the ratio of ownership expenses to wages back into the affordable range.
“Home affordability is in a holding pattern this quarter–financially stressful for average wage earners but not changing much. This is not unusual during the Winter lull when home prices level out. A recent small decline in mortgage rates surely hasn’t hurt either for fledgling buyers,”, said Rob Barber, CEO for ATTOM. “If history is a good guide, prices will rise as we head into the peak buying season that’s about to start, which will worsen affordability measures.”
Barber added, “with so much economic uncertainty these days connected to investment markets, federal policy shifts and very mixed economic forecasts, it is anyone’s guess how much prices will move.”
The report determines affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses—including mortgage payments, property taxes and insurance—on a median-priced single-family home, assuming a 20% downpayment and a 28% maximum “front-end” debt-to-income ratio. That required income is measured against annualized average weekly wage data from the U.S. Bureau of Labor Statistics.
Counties with the largest populations that were determined unaffordable in Q1 include:
- Los Angeles County, California
- Maricopa County (Phoenix), Arizona
- San Diego County, California
- Orange County, California (outside Los Angeles)
- Miami-Dade County, Florida
On the flip side, the most populous of the counties with affordable levels of major expenses on median-priced homes during Q1 of 2025 are:
- Cook County (Chicago), Illinois
- Harris County (Houston), Texas
- Wayne County (Detroit), Michigan
- Philadelphia County, Pennsylvania
- Cuyahoga County (Cleveland), Ohio
Median Prices Dip Quarterly
The national median price for single-family homes and condos has declined in Q1 by roughly 1% from record-high levels of about $355,000 during the second through the fourth quarters of 2024. Small price dips are common during traditionally slower first-quarter time periods for the U.S. housing market. However, the latest figure still represents a 5.2% increase over Q1 of last year and is 10.1% above the typical price in Q1 of 2023.
At the county level, similar patterns have held over the past year. Median home prices have increased since the first quarter of last year in 416, or 72.5%, of the 574 counties reviewed. Quarterly, however, typical values decreased in 417, or 72.6%, of those markets. Data was analyzed for counties with a population of at least 100,000 and at least 50 single-family home and condo sales in Q1 of 2025.
Among the 48 counties in the report with a population of at least one million, the biggest year-over-year increases in median prices during Q1 of 2025 are in:
- Suffolk County (Long Island), New York (up 11.9% annually)
- Nassau County (Long Island), New York (up 9.4%)
- Cuyahoga County (Cleveland), Ohio (up 9.4%)
- Wayne County (Detroit), Michigan (up 8.9%)
- Honolulu County, Hawaii (up 7.6%)
Counties with a population of at least one million where median prices remain down most from the first quarter of 2024 to the same period this year are:
- Alameda County (Oakland), California (down 11.2%)
- Fulton County (Atlanta), Georgia (down 4.2%)
- Duval County (Jacksonville), Florida (down 2.9%)
- Harris County (Houston), Texas (down 1.9%)
- King County (Seattle), Washington (down 1.9%)
Prices Improving More Than Wages
As home values keep rising throughout most of the U.S., year-over-year price changes have surpassed changes in weekly annualized wages during the first quarter of 2025 in 269, or 46.9%, of the counties analyzed in the report. The opposite is true in 53.1% of those counties. That roughly 50/50 split has helped keep home affordability at roughly the same levels over the past year.
The latest group of counties where prices have increased more annually than wages, or declined less, include:
- Los Angeles County, California
- Cook County, (Chicago), Illinois
- Maricopa County (Phoenix), Arizona
- Orange County, California (outside Los Angeles)
- Queens County, New York
The latest group where wage increases have beaten out shifts in median prices include:
- Harris County, (Houston), Texas
- San Diego County, California
- Miami-Dade County, Florida
- Kings County (Brooklyn), New York
- Dallas County, Texas
Wage Consumption
The portion of average wages consumed by major expenses on median-priced single-family homes and condos has declined quarterly in 407, or 70.9%, of the 574 counties analyzed. This has happened amid a period in which typical home values have held steady nationwide and average 30-year, fixed mortgage rates have dipped back below 7%, pushing ownership costs downward. However, the expense-to-wage ratio is still up annually in 60% of those markets.
Nationwide, the typical $2,021 cost of mortgage payments, homeowner insurance, mortgage insurance and property taxes is down 0.7% quarterly while the average national wage has grown 1.1%. Annually, though, typical costs are up 5.6% compared to just a 4.2% increase in the average national wage. The latest expense total commonly consumes 32.5% of the average annual national wage of $74,698. That is about the same as the 32.7% portion during Q4 of 2024, but still up from 31.4% in Q1 of last year.
The cost-to-wage ratio exceeds the 28% lending guideline in 413 of the counties analyzed, assuming a 20% down payment. That percentage is down from 75.4% the Q4 of 2024, based on the same group of counties, and from 70.9% a year ago. But it remains far above the 31.2% figure recorded in early 2021.
Affordability downturns over the past year, while small, have spread consistently across all price segments of the U.S. housing market, with somewhat higher concentrations in the Northeast and Midwest. The Midwest consistently has been the most affordable for local wage earners, so the latest trends continue to point to that region headed toward the same difficult territory as higher-priced areas.
Click here for more on ATTOM’s report on Q1 housing affordability.
