Q2’17 Median Home Prices Least Affordable Since Q3’08

Posted by Amanda Fava on June 29, 2017 No Comments
Categories : Residential Mortgage

The U.S. median home price of $253,000 in the second quarter (Q2) of 2017 was at the least affordable level since Q3 2008 – a nearly nine-year low in affordability, according to ATTOM Data Solutions’ Q2 2017 U.S. Home Affordability Index.

The national home affordability index was 100 in Q2 2017, which is the lowest national affordability index since Q3 2008, when the index was 86, and meaning the share of average wages needed to buy a median-priced home nationwide was on par with its historic average (full methodology), the data shows.

The report also demonstrates that 210 of the 464 U.S. counties analyzed for the index (45%) were less affordable than their historic affordability norms in Q2 2017 – the highest share since Q4 2009.

“While home price appreciation in the second quarter accelerated to the fastest pace in more than three years, wage growth turned negative, posting the biggest year-over-year decrease in five years in Q4 2016 – the most recent average weekly wage data available,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.

“That combination of accelerating home price growth and slowing wage growth, along with mortgage interest rates that are up nearly 50 basis points from a year ago, eroded home affordability nationwide to the lowest level in nearly nine years,” he adds.

Median home prices in Q2 2017 grew at a faster annual pace than average weekly wages in 403 of the 464 counties analyzed in the report (87%), and Denver accounts for three of the five counties with the lowest affordability index in Q2 2017.

Counties with the lowest affordability index (least affordable relative to historic norms for the county) in Q2 2017 were Denver County (74); Genesee County, Mich., in the Flint metro area (75); Adams County, Colo., in the Denver metro area (77); Arapahoe County, Colo., in the Denver metro area (78); and Weld County, Colo., in the Greeley metro area (78).

Moreover, nationwide in Q2 2017, buying a median-priced home required 31.8% of average wages.

Counties with the highest shares of average wages needed to buy a median-priced home in Q2 2017 were Marin County, Calif., in the San Francisco metro area (126.4%); Kings County (Brooklyn), N.Y. (125.9%); Santa Cruz County, Calif. (112.3%); Summit County, Utah, in the Summit Park metro area (107.8%); and Monroe County, Fla., in the Key West metro area (100.3%).

Average wage earners would need to spend less than 25% of their income to buy a median-priced home in 102 of the 464 counties (22%) analyzed for the report, including counties in Detroit, Philadelphia, Cleveland, Pittsburgh and St. Louis, the index shows.

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