Average Wage Above Level Needed To Afford Typical Home in First Quarter of 2021; Historic Affordability Improved in First Quarter In About Half of U.S. Housing Markets; National Median Home Price Up 18 Percent Over First Quarter of 2020

Irvine, CA, April 1, 2021 (PRNewswire) – ATTOM Data Solutions, curator of the nation’s premier property database, today released its first-quarter 2021 U.S. Home Affordability Report, showing that median home prices of single-family homes and condos in the first quarter of this year were more affordable than historical averages in 52 percent of counties with enough data to analyze. That was down from 63 percent of counties in the first quarter of 2020 and 95 percent during the same period five years ago. But rising wages and falling mortgage rates still compensated for near-20 percent spikes in home prices over the past year, helping to keep median home prices affordable for average wage earners around the country.

The report determined affordability for average wage earners by calculating the amount of income needed to meet monthly home ownership expenses — including mortgage, property taxes and insurance — on a median-priced home, assuming a 20 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics (see full methodology below). The 20-percent down payment criterion marks an update to ATTOM’s affordability analysis, which now shows smaller portions of income needed to afford home ownership than recent reports.

Compared to historical levels, median home prices in 287 of the 552 counties analyzed in the first quarter of 2021 were more affordable than past averages. That was down from 349 of the same group of counties in the first quarter of 2020, a trend that came during a 12-month period when the national median home price shot up 18 percent, to $278,000, in the first quarter of 2021.

Yet, with workplace pay rising and home mortgage rates continuing to hit historic lows, major expenses on a median-priced home nationwide still consumed just 23.7 percent of the average wage across the country in the first quarter of 2021. That figure was up from 22 percent in first quarter of 2020 and from 19.7 percent five years ago. But it remained well within the 28 percent standard lenders prefer for how much homeowners should spend on those major expenses.

Those mixed trends – homes remaining affordable but not quite as much as they have historically – happened amid a surge over the past year of home buyers who largely escaped the economic damage caused by the recent worldwide Coronavirus pandemic. As those home seekers pursued a dwindling supply of homes for sale, prices shot up – just not enough to significantly outweigh the benefits of increased wages and average mortgage rates that sat below 3 percent.

“The past year certainly has been an odd one for the U.S. housing market. Home prices surged at a remarkable pace even as the virus pandemic damaged the U.S. economy, which dropped historical affordability levels. But average workers untarnished by the pandemic were still able to afford the typical home because wages and rock-bottom interest rates worked to their favor in a big way,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Much remains uncertain about the housing market in 2021. A lot will depend on how well the broader U.S. economy recovers from the pandemic and whether there are still many more buyers looking to escape congested neighborhoods most prone to the virus, pushing prices even higher. But for now, our data shows that average workers are able to manage the costs associated with rising values.”

Among the 552 counties in the report, 327 (59 percent) had major home-ownership expenses on typical homes in the first quarter of 2021 that were affordable for average local wage earners, based on the 28-percent guideline. The largest of those counties were Cook County (Chicago), IL; Harris County (Houston), TX; Dallas County, TX; Bexar County (San Antonio), TX, and Wayne County (Detroit), MI.

The most populous of the 225 counties where major expenses on median-priced homes were unaffordable for average local earners in the first quarter of 2021 (41 percent of the counties analyzed) were Los Angeles County, CA; Maricopa County (Phoenix), AZ; San Diego County, CA; Orange County, (outside Los Angeles), CA and Miami-Dade County, FL.

Home prices up at least 10 percent in two-thirds of country
Median home prices in the first quarter of 2021 were up by at least 10 percent from the first quarter of 2020 in 360, or 65 percent, of the 552 counties included in the report. Counties were included if they had a population of at least 100,000 and at least 50 single-family home and condo sales in the first quarter of 2021.

Among the 42 counties with a population of at least 1 million, the biggest year-over-year gains in median prices during the first quarter of 2021 were in Wayne County (Detroit), MI (up 24 percent); Suffolk County, NY (outside New York City) (up 20 percent); Bronx County, NY (up 19 percent); Maricopa County (Phoenix), AZ (up 19 percent) and Harris County (Houston), TX (up 18 percent).

Counties with a population of at least 1 million that had the smallest year-over-year increases (or price declines) in the first quarter of 2021 were New York County (Manhattan), NY (down 2 percent); Santa Clara County (San Jose), CA (up 7 percent); Hennepin County (Minneapolis), MN (up 7 percent); Kings County (Brooklyn), NY (up 8 percent) and Orange County, CA (outside Los Angeles) (up 8 percent).

Price appreciation up more than wage growth in almost 90 percent of markets
Home price appreciation outpaced average weekly wage growth in the first quarter of 2021 in 474 of the 552 counties analyzed in the report (86 percent), with the largest counties including Los Angeles County, CA; Cook County (Chicago), IL; Harris County (Houston), TX; Maricopa County (Phoenix), AZ and San Diego County, CA.

Average annualized wage growth outpaced home price appreciation in the first quarter of 2021 in only 78 of the 552 counties in the report (14 percent), including Santa Clara County (San Jose), CA; New York County (Manhattan), NY; Honolulu County, HI; San Francisco County, CA and Suffolk County (Boston), MA.

Less than 28 percent of wages needed to buy a home in six of every 10 markets
Major ownership costs on median-priced homes in the first quarter of 2021 consumed less than 28 percent of average local wages in 327 of the 552 counties analyzed in this report (59 percent).

Counties requiring the smallest percent were Schuylkill County, PA (outside Allentown) (6.3 percent of annualized weekly wages needed to buy a home); Bibb County (Macon), GA (8.3 percent); Fayette County, PA (outside Pittsburgh) (8.4 percent); Macon County (Decatur), IL (9.9 percent) and Robeson County, NC (outside Fayetteville) (10.6 percent).

Among the 42 counties in the report with a population of at least 1 million, those where home ownership typically consumed less than 28 percent of average local wages in the first quarter of 2021 included Wayne County (Detroit), MI (12.2 percent); Philadelphia County, PA (14.1 percent); Cuyahoga County (Cleveland), OH (14.4 percent); Fulton County (Atlanta), GA (19.4 percent) and Franklin County (Columbus), OH (19.5 percent).

A total of 225 counties in the report (41 percent) required more than 28 percent of annualized local weekly wages to afford a typical home in the first quarter of 2021. Those counties that required the greatest percentage of wages were Kings County (Brooklyn), NY (75.7 percent of annualized weekly wages needed to buy a home); Marin County, CA (outside San Francisco) (75.5 percent); Santa Cruz County, CA (69.9 percent); Monterey County, CA, (outside San Francisco) (68.1 percent) and Maui County, HI (65.9 percent).

Aside from Kings County, NY, counties with a population of at least 1 million where home ownership consumed more than 28 percent of average annualized local wages in the first quarter included Orange County, CA (outside Los Angeles) (57.7 percent); Queens County, NY (56.3 percent); Nassau County, NY (outside New York City) (53.5 percent) and Alameda County (Oakland), CA (51.6 percent).

Average wages needed to afford median-priced home exceed $75,000 in less than 15 percent of markets
Annual wages of more than $75,000 were needed in the first quarter of 2021 to afford the typical home in just 75, or 14 percent, of the 552 markets in the report.

The highest annual wages required to afford the typical home were in New York County (Manhattan), NY ($247,802); San Mateo County (outside San Francisco), CA ($230,848); Marin County (outside San Francisco), CA ($218,830); San Francisco County, CA ($212,892) and Santa Clara County (San Jose), CA ($207,691).

The lowest annual wages required to afford a median-priced home in the first quarter of 2021 were in Schuylkill County, PA (outside Allentown) ($10,089); Fayette County, PA (outside Pittsburgh) ($12,957); Bibb County (Macon), GA ($13,708); Robeson County, NC (outside Fayetteville) ($14,133) and Cambria County, PA (east of Pittsburgh) ($16,251).

Slight majority of housing markets more affordable than historic averages
Among the 552 counties analyzed in the report, 287 (52 percent) were more affordable in the first quarter of 2021 than their historic affordability averages, down from 63 percent of the same group of counties that were more affordable historically in the first quarter of 2020.

Counties with a population of at least 1 million that were more affordable than their historic averages (indexes of more 100 are considered more affordable compared to historic averages) included New York County (Manhattan), NY (index of 128); Montgomery County, MD (outside Washington, D.C.) (121); Cook County (Chicago), IL (114); King County (Seattle), WA (110) and Santa Clara County (San Jose), CA (108).

Counties with the best affordability indexes in the first quarter of 2021 included Schuylkill County, PA (outside Allentown) (index of 195); Macon County (Decatur), IL (188); Fayette County, PA (outside Pittsburgh) (171); Calcasieu Parish (Lake Charles), LA (149) and Bibb County (Macon), GA (146).

Among counties with a population of at least 1 million, those where the affordability indexes improved the most from the first quarter of 2020 to the first quarter of 2021 were New York County (Manhattan), NY (index up 14 percent); Santa Clara County (San Jose), CA (up 7 percent); Orange County, CA (outside Los Angeles) (up 3 percent); Kings County (Brooklyn), NY (up 3 percent) and Hennepin County (Minneapolis), MN (up 2 percent).

Slightly fewer than half of markets less affordable than historic averages
Among the 552 counties in the report, 265 (48 percent) were less affordable than their historic affordability averages in the first quarter of 2021, up from 37 percent in the first quarter of last year.

Counties with a population greater than 1 million that were less affordable than their historic averages (indexes of less than 100 are considered less affordable compared to their historic averages) included Wayne County (Detroit), MI (index of 78); Dallas County, TX (81); Tarrant County (Fort Worth), TX  (82); Harris County (Houston), TX (83) and Maricopa County (Phoenix), AZ (86).

Counties with the worst affordability indexes in the first quarter of 2021 were Canyon County, ID (outside Boise) (index of 67); Grayson County, TX (outside Dallas) (72); Ada County (Boise), ID (74); St. Louis City/County, MO (75) and Bonneville County (Idaho Falls), ID (76).

Counties with a population of least 1 million residents where affordability indexes decreased the most from the first quarter of 2020 to the same period in 2021 included Wayne County (Detroit), MI (index down 11 percent); Harris County (Houston), TX (down 11 percent); Dallas County, TX (down 8 percent); Bronx County (down 8 percent) and Oakland County, MI (outside Detroit) (down 8 percent).

Home Prices Growing Faster Than Rents in More Than 80 Percent of U.S.; But Prices Still More Affordable in 63 Percent of Markets; Renting Remains More Affordable in Most Populous Urban Markets

Irvine, CA – Jan. 7, 2021 (PRNewswire) — ATTOM Data Solutions, curator of the nation’s premier property database, today released its 2021 Rental Affordability Report, which shows that owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 572, or 63 percent of the 915 U.S. counties analyzed for the report.

That has happened even though median home prices have increased more than average rents over the past year in 83 percent of those counties and have risen more than wages in almost two-thirds of the nation.

The analysis incorporated recently released fair market rent data for 2021 from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics along with public record sales deed data from ATTOM in 915 U.S. counties with sufficient home sales data (see full methodology below).

Home ownership is more affordable in almost two-thirds of the country following a year when the impact of declining interest rates helped counteract home prices that rose faster than rents and wages. Trends favoring home ownership show up most in suburban and rural areas with the most affordable home values, while renting remains more affordable in the biggest cities.

“Home-prices are rising faster than rents and wages in a majority of the country. Yet, home ownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check,” said Todd Teta chief product officer with ATTOM Data Solutions. “It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and home ownership. The coming year is totally uncertain, amid so many questions connected to the Coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it.”

Home prices rising faster than rents in 83 percent of counties across U.S.

Median prices for three-bedroom homes are increasing more than average three-bedroom rents in 764 of the 915 counties analyzed in this report. Counties were included if they had at least 500 sales in YTD (Jan-Nov) 2020.

The most populous counties where home prices are rising faster are Los Angeles County, CA; Cook County (Chicago), IL; Harris County (Houston), TX; Maricopa County (Phoenix), AZ and San Diego County, CA.

The largest counties where rents are rising faster are Kings County (Brooklyn), NY; Queens County, NY; New York County (Manhattan), NY, Bronx County, NY and Allegheny County (Pittsburgh), PA.

Renting more affordable than buying in nation’s most populated counties

Renting is more affordable than buying a home in 18 of the nation’s 25 most populated counties and in 29 of 44 counties with a population of 1 million or more (66 percent) — including Los Angeles County, CA; Cook County (Chicago), IL; Harris County (Houston), TX; San Diego County, CA and Orange County, CA (outside Los Angeles).

Other markets with a population of more than 1 million where it is more affordable to rent than to buy a home include counties in the New York City, Seattle, Dallas, San Francisco, San Jose and Boston and Riverside, CA, metropolitan areas.

Among the 44 U.S. counties analyzed in the report with a population of 1 million or more, those where it is more affordable to buy a home than rent include Maricopa County (Phoenix), AZ; Miami-Dade County, FL; Clark County (Las Vegas), NV; Tarrant County (Fort Worth), TX and Broward County (Fort Lauderdale), FL.

Buy or Rent in 2021 Heat Map

Owning more affordable in less-populated counties

Home ownership is more affordable than renting in counties with a population of less than 1 million, especially among those with less than 500,000 people.

Owning is more affordable in 47, or 50 percent, of the 94 counties with 500,000 to 999,999 people. The largest in this group where it is more affordable to buy are St. Louis County, MO; Pinellas County (Tampa), FL; Milwaukee County, WI; Marion County (Indianapolis), IN and Shelby County (Memphis), TN. The largest in this group where it is more affordable to rent are Honolulu County, HI; Fresno County, CA; Westchester County, NY (outside New York City); Collin County, TX (outside Dallas) and Fairfield County (outside New York City), CT.

Among the remaining 779 counties with a population less than 500,000, owning is more affordable in 510, or 65 percent. The largest in this group where owning is more affordable are Greenville County, SC; Adams County, CO (outside Denver); Lake County (Gary), IN; Hampden County (Springfield), MA and Clark County, WA (outside Portland, OR). The largest counties where renting is more affordable are Spokane County, (WA); Morris County, NJ (outside New York City); Polk County (Des Moines), IA; Richmond County (Staten Island), NY and Tulare County (Visalia), CA.

Most affordable rental markets in South and Midwest; least affordable in West

The report shows that renting the typical three-bedroom property requires at least a third of average weekly wages in 506 of the 915 counties analyzed for the report (55 percent).

The most affordable markets for renting are mostly in the South and Midwest, led by Roane County, TN (outside Knoxville) (18.4 percent of wages needed to rent); Benton County (Rogers), AR (20.7 percent); Madison County (Huntsville), AL (21.6 percent); Greene County, OH (outside Dayton) (22.5 percent) and Sullivan County (Kingsport), TN (22.6 percent).

The most affordable for renting among counties with a population of at least 1 million are Allegheny County (Pittsburgh), PA (23.9 percent of average wages needed to rent); Cuyahoga County (Cleveland), OH (24 percent); Fulton County (Atlanta), GA (24.6 percent); Wayne County (Detroit), MI (26 percent) and Oakland County, MI (outside Detroit) (26.1 percent).

The least affordable for renting are mostly in the West, led by Santa Cruz County, CA (82.9 percent of average wages needed to rent); Santa Barbara County, CA (68.7 percent); Marin County, CA (outside San Francisco) (67.9 percent); Park County, CO (outside Denver) (67.5 percent) and Kauai County, HI (66 percent).

The least affordable for renting among counties with a population of at least 1 million are Kings County (Brooklyn), NY (62.5 percent of average wages needed to rent); Orange County, CA (outside Los Angeles) (60 percent); Queens County, NY (56.3 percent), San Diego County, CA (55.6 percent) and Contra Costa County, CA (outside San Francisco) (55 percent).

Most affordable home ownership markets also in South and Midwest; least affordable in West and Northeast

The report shows that owning the median-priced three-bedroom home requires at least a third of average weekly wages in 442 of the 915 counties analyzed for the report (48 percent).

The most affordable markets for owning are Cocke County, TN (east of Knoxville) (9.8 percent of average wages needed to own); Edgecombe County (Rocky Mount), NC (10.7 percent); Bartholomew County (Columbus), IN (10.8 percent); Darlington County, SC (outside Florence) (11.4 percent) and Vermillion County, IL (east of Champaign) (11.8 percent).

The most affordable for owning among counties with a population of at least 1 million are Wayne County (Detroit), MI (15.2 percent of average wages needed to own); Philadelphia County, PA (20.7 percent); Cuyahoga County (Cleveland), OH (20.9 percent); Allegheny County (Pittsburgh), PA (21.8 percent) and Mecklenburg County (Charlotte), NC (28.3 percent).

The least affordable markets for owning are Marin County, CA (outside San Francisco) (105.6 percent of average wages needed to own); Kings County (Brooklyn), NY (101.3 percent); Eagle County (Vail), CO (99.8 percent); Santa Cruz County, CA (98.1 percent) and New York County (Manhattan), NY (95.9 percent).

Aside from Kings and New York counites, the least affordable for owning among counties with a population of at least 1 million are Orange County, CA (76.7 percent of average wages needed to own); Queens County, NY (73.9 percent) and Alameda County (Oakland), CA (70.2 percent).

Wage growth outpacing rent growth in 81 percent of markets

Wages are increasing more than average fair market rents in 739 of the 915 counties analyzed in the report (81 percent), including Los Angeles County, CA; Cook County (Chicago), IL; Maricopa County (Phoenix), AZ; San Diego County, CA and Orange County, CA (outside Los Angeles).

Average fair-market rents are rising faster than average wages in 176 of the 915 counties analyzed in the report (19 percent), including Harris County (Houston), TX; Tarrant County (Fort Worth), TX; Fresno County, CA; Pinellas County (Tampa), FL and Macomb County, MI (outside Detroit).

Home prices rising faster than wages in almost two-thirds percent of markets

Median home prices are rising faster than average weekly wages in 566 of the 915 counties analyzed in the report (62 percent), including Los Angeles County, CA; Cook County (Chicago), IL; Harris County (Houston), TX; Maricopa County (Phoenix), AZ and Miami-Dade County, Florida.

Average weekly wages are rising faster than median home prices in 349 of the 915 counties analyzed in the report (38 percent), including San Diego County, CA; Orange County, CA (outside Los Angeles); Kings County (Brooklyn), NY; Queens County, NY and King County (Seattle), WA.

Methodology

For this report, ATTOM Data Solutions looked at 50^th percentile average rental data for three-bedroom properties in 2021 from the U.S. Department of Housing and Urban Development, along with second-quarter 2020 average weekly wage data from the Bureau of Labor Statistics (most recent available) and January-November (YTD) 2020 home price data from ATTOM Data Solutions publicly recorded sales deed data in 915 counties nationwide.

Rental affordability is the average fair market rent for a three-bedroom property as a percentage of the average monthly wage (based on average weekly wages). Home buying affordability is the monthly house payment for a median-priced home (based on a 3 percent down payment and including mortgage, property tax, homeowner’s insurance and private mortgage insurance) as a percentage of the average monthly wage.