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Last updated on February 2nd, 2021 at 04:36 pm
Curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), released their second-quarter 2020 U.S.
Home Affordability Report. The report showed that median home prices of single-family homes and condos in the second quarter of 2020 are more affordable than historical averages in 49 percent of U.S. counties with enough data to analyze, up from 31 percent a year ago.
The report determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments — including mortgage, property taxes, and insurance — on a median-priced home, assuming a 3% down payment and a 28 percent maximum “front-end” debt-to-income ratio.
That amount of income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics.
Out of 406 counties with sufficient data to analyze, 200 are now more affordable, compared to 126 of the same group of counties that were affordable last year.
Overall, higher wages along with lower mortgage interest rates have overpowered regular price increases to create greater affordability.
In spite of the buying conditions being improved, major costs on median-priced homes remain unaffordable to average wage earners in 74 percent of counties included in the second quarter of 2020 analysis.
This means major homeownership costs would be more than 28 % of the average wages from county to county.
Todd Teta, chief product officer with ATTOM Data Solutions said “The latest affordability numbers reveal a win-win situation for sellers as well as buyers.
Prices are rising again around the country during the current home-buying season, despite worries that the economic impact of the Coronavirus pandemic would halt the nine-year run-up in home values.
But a combination of wage gains and declining mortgage rates are helping to override the increases and make homes more affordable in large swaths of the United States, Virus pandemic concerns are still quite valid and may show up in the coming months, which could hurt prices as well as affordability.
That remains a significant potential cloud hanging over the market. But as of now, things are looking up for people on both sides of the buying equation.”
Out of those 49 percent of markets more affordable than historic averages, counties with the best affordability indexes include Macon County, Illinois (index of 177); Berkshire County, Massachusetts (134); Newport News City/County, Virginia (133); Hampshire County, Massachusetts (132); and Morris County, New Jersey (130).
Reference Source: INMAN
