Almost 90% of U.S. counties saw housing costs outpace wage growth in the second quarter. Households that once used 26% of income for housing were using 31.5%.
SAN FRANCISCO – According to Attom Data Solutions, the share household income devoted to major monthly housing costs grew at its fastest pace dating back at least 20 years.
The median home purchase in the second quarter of 2022 would have taken up 31.5% of the same period’s average annualized wage of $67,587. In the first quarter, when mortgage rates and prices were lower, a typical home purchase totaled 26% of the average wage.
“With interest rates almost doubling, homebuyers are faced with monthly mortgage payments that are between 40% and 50% higher than they were a year ago – payments that many prospective buyers simply can’t afford,” says Attom Executive Vice President of Market Intelligence Rick Sharga.
Major monthly housing costs surpassed 28% of local wages in two-thirds of U.S. counties with sufficient data to analyze, up from 50% of counties in the first quarter. Almost 90% of counties saw home prices overtake wage growth, which Sharga speculates “could lead to prices plateauing or even correcting modestly in some markets.”
However, some large population centers remained within the 28% threshold for housing expenses, including Chicago, Houston, Philadelphia, Minneapolis and Columbus, Ohio. Still, housing in Los Angeles, San Francisco, Brooklyn and Phoenix remained unaffordable.
These same home purchases may consume an even bigger chunk of household income for first-time buyers.
Source: Inman (06/30/22) Houston, Daniel
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