Nearly all of the counties analyzed recently by Attom Data Solutions had homes on the market last quarter that were less affordable than their historical averages. STUDIOGSTOCK VIA GETTY IMAGES

Austin Business Journal reports, "Homes across America remained unaffordable for many prospective buyers in the second quarter, with single-family home and condo prices less affordable during that three-month period compared to historical averages in 99% of the nation's counties.

That's according to a recent analysis by Attom Data Solutions LLC, which looked at housing data from U.S. counties with a population of at least 100,000 and that had at least 50 single-family home and condo sales in the second quarter.

The analysis also found that expenses for existing homeowners on median-priced homes are on the rise. Those costs consumed 35.1% of the average national wage in the second quarter, a high point since 2007 and meaningfully higher than the 28% lending guideline, according to Attom.

It's the latest data point to underscore how much property taxes, insurance and other homeownership costs have climbed since the Covid-19 pandemic.

Attom CEO Rob Barber wasn't available for a phone interview by deadline, but in a response to emailed questions, Barber said supply and rates continue to be the two biggest hurdles for housing affordability in the U.S.

"One is too low; the other is too high, or at least a lot higher than it was when times were easier," Barber said.

Despite improvements in housing inventory this year, Barber said the supply of homes for sale is only about two-thirds of what it was five years ago. And mortgage rates that rose rapidly their sub-3% levels in 2021 are keeping homeowners "locked in" to their mortgages and homes, further stymying inventory.

That means house hunters have fewer options, which pushes up home prices, especially during peak demand periods in the spring and summer, Barber said.

Higher mortgage rates also mean higher payments. A $300,000 mortgage at a 7% rate costs about $700 more per month than that same-priced house with a 3% rate, according to Attom.

Nearly all of the 589 counties analyzed by Attom had homes on the market last quarter that were less affordable than their historical averages.

Counties with a population of at least 1 million that were less affordable than their historic averages included Mecklenburg County (Charlotte), North Carolina; Fulton County (Atlanta), Georgia; Wake County (Raleigh), North Carolina; Franklin County (Columbus), Ohio; and Wayne County (Detroit), Michigan.

There were a handful of counties that proved exceptional, becoming more affordable than their historical averages in Q2. They included Macon County (Decatur), Illinois; San Francisco County, California; Ontario County (outside Rochester), New York; Mercer County (north of Pittsburgh), Pennsylvania; and New York County (Manhattan), New York.

There also remains a delta between the cost of housing and incomes.

The national median home price rose 4.7% annually, to $360,000, in the second quarter, while annualized weekly wages rose only 3.3%, to $72,358, in that same time period.

New construction has ramped up as the nation's existing inventory has remained stifled, rising from about 300,000 in 2020 to 450,000 in 2022. But that figure held steady in 2023, according to the U.S. Census Bureau.

"At the same time, the Federal Reserve has indicated that benchmark interest rates in the U.S. will not change much for the rest of 2024, which means mortgage rates are unlikely to change notably in the near future," Barber said. "With prices spiking again this year, affordability has worsened and there appears to be no reason to predict a turnaround at least until price increases level off as the market slows in the fall — assuming that the usual annual pattern holds up.”

Homeownership costs are increasing

Even for existing homeowners, costs continue to rise.

Mortgage payments, homeowner insurance, mortgage insurance and property taxes typically combined to cost $2,114 nationally in Q2 — a new high, according to Attom, and consuming 35.1% of the average annual national wage. That's up from 31.9% in the first quarter and 32.1% in the second quarter of last year. In the first quarter of 2021, the share was 21.3%.

Attom found that annual wages of $75,000-plus were needed to pay for major costs on median-priced homes purchased in Q2 in 58.2% of the 589 markets analyzed — but average wages exceeded that amount in only 11.9% of the counties reviewed.

In more than one-third of the markets analyzed, major expenses consumed at least 43% of average local wages, a ratio widely considered to be seriously unaffordable.

"Rising insurance premiums and property taxes add more pebbles to the pile of affordability challenges for buyers," Barber said. "The same can be said for upward inflationary pressures on the cost of any renovations or alterations buyers want to make after they move in. There isn't much on the immediate horizon to suggest a significant improvement in home affordability.""


Source: Austin Business Journal 

Written by: Ashley Fahey 

Published: July 3, 2024


Posted by Grossman & Jones Group on


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