According to a study of 414 counties in the United States by ATTOM Data Solutions, affordable housing options in the U.S. are declining. The Housing Market Index, which tracks national home prices, shows that prices have increased by 40% over the last four years. Rising prices are no problem so long as incomes are rising as well. That hasn’t been the case.
The affordability index is based on the share of average wages required to make monthly payments (including everything from mortgage interest, insurance and taxes) on a home at the median price.
The average amount earners must spend in all 414 counties to buy the median-priced home is currently 36.3% of their income — a mark below the historic 38.8% average, but higher than the 35.8% reported last year. 24% of the 414 counties had less affordable housing markets than their historic average.
But there is a silver lining. Some of the highest-priced markets are actually becoming more affordable, and some buyers are being priced back into the market. Places like Florida, Texas and California are overdue for a slight correction in home prices, and that seems to be taking place now.
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