According to ATTOM’s Q4 2024 U.S. Home Affordability Report, median-priced, single-family homes and condos remain less affordable compared to historical averages in 98% of counties around the nation with enough data to analyze. The latest trend continues a three-year pattern of homeownership requiring historically large portions of wages, as U.S. home prices keep reaching new heights.
ATTOM’s study shows that major expenses on median-priced homes currently consume 34% of the average national wage—an increase of more than one percentage point both quarterly and annually, pushing the figure even farther above the common 28% lending guideline preferred by lenders.
The downturns in current and historic affordability represent the latest measures of how homeownership remains a financial stretch for the average U.S. worker, with the national median home price having climbed to $364,750 in Q4 and mortgage rates, while declining, remain edging near the 7%-mark. Combined, those forces are helping to keep the ratio of ownership expenses to wages in the unaffordable range.
Q4 trends also have reversed a slight improvement during Q3 of this year that had signaled a possible step in the right direction for homeowners. The portion of average wages nationwide required for typical mortgage payments, property taxes and insurance now stands almost 13 points beyond a low point reached early in 2021, right before home-mortgage interest rates shot up from the lowest levels in decades.
“The U.S. housing market continues to generate great profits for most home sellers, but also more and more financial stress for would-be buyers. Average workers now must shell out a larger portion of their wages for major homeownership expenses than at any time since right before the housing market tanked in the late 2000s,” said Rob Barber, CEO for ATTOM. “Despite recent declines in mortgage rates, down payments on typical home purchases have reached four times the average national wage.”
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 and condo, assuming a 20% downpayment and a 28% maximum “front-end” debt-to-income (DTI) ratio. That required income is measured against annualized average weekly wage data from the U.S. Bureau of Labor Statistics.
Compared to historical levels, median homeownership costs in 556 of the 566 counties analyzed in Q4 of 2024 are less affordable than in the past. That is virtually unchanged from both Q3 of 2024, and Q4 of 2023.
Areas of Greatest Unaffordability
Historic measures remain negative as the portion of average local wages consumed by major homeownership expenses on typical homes are considered unaffordable during the fourth quarter of 2024 in about 70% of the 566 counties in the report, based on the 28 percent guideline. Counties with the largest populations that are unaffordable in Q4 include:
- Los Angeles County, California
- Maricopa County (Phoenix), Arizona
- San Diego County, California
- Orange County, California (outside Los Angeles)
- Miami-Dade County, Florida
The most populous of the counties with affordable levels of major expenses on median-priced homes during Q4 of 2024 include:
- Cook County (Chicago), Illinois
- Harris County (Houston), Texas
- Wayne County (Detroit), Michigan
- Philadelphia County, Pennsylvania
- Cuyahoga County (Cleveland), Ohio
National Median Home Price Up Quarterly
Further causing affordability issues for most Americans, ATTOM reports the national median price for single-family homes and condos has risen to a record high of $364,750 in Q4 of 2024. The latest figure represents a 2.1% increase over Q3 of this year, and is 11.4% above the typical price in Q4 of 2023.
At the county level, the pattern is more varied. Median home prices have increased since Q4 of last year in 503, or 88.9%, of the 566 counties included in the report. Quarterly, however, typical values they have risen in only 210, or 37.1% of those markets. That is a sign that the latest jump in national median price may be driven more by larger numbers of sales in markets with bigger increases.
Among the counties in the report with a population of at least one million, the biggest year-over-year increases in median prices during Q4 2024 were reported in:
- Bronx County, New York (up 13.3% annually)
- Wayne County (Detroit), Michigan (up 12.9%)
- Cook County (Chicago), Illinois (up 12.1%)
- Suffolk County (Long Island), New York (up 11.5%)
- Santa Clara County, California (up 11%)
The only counties with a population of at least one million where median prices remain down from Q4 of 2023 to the same period this year are:
- New York County (Manhattan), New York (down 3.3%)
- Kings County (Brooklyn), New York (down 1%)
Home Prices Outpacing Wages
As home values keep rising throughout most of the nation, year-over-year price changes have outpaced changes in weekly annualized wages during Q4 of 2024 in 429, or 75.8%, of the counties analyzed by ATTOM. That has helped push affordability levels down for average workers around the country.
The latest group of counties where prices have increased more than wages annually include:
- Los Angeles County, California
- Cook County, (Chicago), Illinois
- Maricopa County (Phoenix), Arizona
- San Diego County, California
- Orange County, California (outside Los Angeles)
On the other side of the spectrum, year-over-year changes in average annualized wages have bested price movements during Q4 of 2024 in just 137 of the counties analyzed (24.2%).
Homeownership Biting Into Household Income
Despite falling mortgage rates in recent months, the portion of average local wages consumed by major expenses on median-priced single-family homes and condos has risen quarterly in 357, or 63.1%, of the 566 counties analyzed, although it is still down annually in slightly more than half.
Nationwide, the typical $2,092 cost of mortgage payments, homeowner insurance, mortgage insurance and property taxes is up 4.6% quarterly and 6.1% annually to a new all-time high. That has outpaced the 1% quarterly and 3.1 annual gains in the average national wage.
The latest expense total commonly consumes 34% of the average annual national wage of $73,918. That is up from 32.5% in Q3 of 2024 and from 32.7% in Q4 of 2023. The current level is nearly 13 percentage points more than a recent low point of 21.3% hit in Q1 of 2021.
The cost-to-wage ratio exceeds the 28% lending guideline in 436, or 77%, of the counties analyzed, assuming a 20% downpayment. That percentage is unchanged from Q3 of 2024, based on the same group of counties, but is up slightly from 75.4% a year ago. It is far above the 31% figure recorded in early 2021.
In about one-third the markets analyzed around the U.S., major expenses consume at least 435 of average local wages, a benchmark considered “seriously unaffordable.
Affordability downturns over the past year have hit hardest in low- and mid-priced markets, where prices fall below $350,000, with concentrations in the Northeast and Midwest. Those areas generally have been among the more affordable for local wage earners–a sign that they could be headed into the same difficult territory as more expensive markets.
Areas Posing the Biggest Financial Burdens
All but two of the top 25 counties where major ownership costs require the largest percentage of average local wages Q4 of 2024 are on the Northeast or West coasts, extending past trends. The leaders include:
- Santa Cruz County, California (115.5% of annualized local wages needed to buy a single-family home or condo)
- Maui County, Hawaii (114.6%)
- \Marin County, California (outside San Francisco) (109.7%)
- Kings County (Brooklyn), New York (106.5%)
- San Luis Obispo County, California (96.2%)
Aside from Kings County, those with a population of at least one million where major ownership expenses typically consume more than 28% of average local wages in Q4 of 2024 include:
- Orange County, California (outside Los Angeles) (96% required)
- Queens County, New York (79.4%)
- Alameda County (Oakland), California (77.2%)
- San Diego County, California (72.9%)
Counties where the smallest portion of average local wages are required to afford the median-priced home during Q4 of 2024 are:
- Cambria County, Pennsylvania (east of Pittsburgh) (11.5% of annualized weekly wages needed to buy a home)
- Schuylkill County, Pennsylvania (outside Allentown) (12.8%)
- Macon County (Decatur), Illinois (13.3%)
- Peoria County, Illinois (13.4%)
- Mobile County, Alabama (13.6%)
Major home ownership expenses on typical homes sold in the fourth quarter of 2024 require an annual income of $89,649 to be affordable—21.3% more than the latest average national wage of $73,918. Annual wages of more than $75,000 are needed to pay for major costs on median-priced homes purchased during Q4 of 2024 in 325, or 57.4%, of the 566 markets in the report. That continues to pose major obstacles as average wages exceed that amount in just 13.6% of the counties reviewed.
Click here for more on ATTOM’s Q4 affordability report.
