Home Affordability Improves In 60 Percent Of U.S. Markets In Q3 2017 Compared To Previous Quarter

IRVINE, Calif., Oct. 5, 2017 /PRNewswire/ -- ATTOM Data Solutions, curator of the nation's largest multi-sourced property database, today released its Q3 2017 U.S. Home Affordability Index, which shows that home affordability in the third quarter improved compared to the previous quarter in 60 percent of 406 U.S. counties analyzed in the report — although affordability was still worse off than a year ago in 79 percent of those counties.

The Q3 2017 home affordability index increased compared to the previous quarter (meaning homes were more affordable) in 243 of the 406 counties analyzed in the report (60 percent), including Los Angeles County, California; Cook County (Chicago), Illinois; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; and San Diego County, California.

Q3 2017 Affordability Heat Map.

The national home affordability index was 100 in the third quarter of 2017, the lowest national affordability index since Q3 2008, when the index was 86 (Full methodology).

"Falling interest rates in the third quarter provided enough of a cushion to counteract rising home prices in most U.S. markets and provide at least some temporary relief for the home affordability crunch," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "More sustainable relief for the affordability crunch, however, will need to be some combination of slowing home price appreciation and accelerating wage growth."  

Wage growth outpacing home price growth in 48 percent of markets
Annual wage growth outpaced annual home price appreciation in 193 of the 406 counties analyzed in the third quarter (48 percent), down from 53 percent in Q2 2017 and down from 50 percent in Q1 2017 — the first time since Q1 2012 that at least half of all markets saw wage growth outpacing home price growth.

"With Southern California boasting some of the highest average sales prices in the country, our market is a testament to the importance of local community job growth," said Michael Mahon, president at First Team Real Estate, covering Southern California. "Los Angeles County is experiencing a sluggish job creation environment, creating an even wider gap in housing affordability. But in Orange County, where we are seeing local government partnering with business owners on growth incentives and business owner recruitment, we continue to see an economic environment where wage growth is exceeding the annual cost of housing inflation."

Since bottoming out nationwide in Q1 2012, median home prices have risen 73 percent while average weekly wages have increased 13 percent over the same period.

"Housing affordability continues to be the topic that troubles me more than just about anything else. As the data shows, housing in the Seattle region is considered unaffordable, which is not a great surprise given our robust economy and substantial population growth coming out of California," said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where home price appreciation outpaced wage growth in all three counties in the metro area.

Home prices less affordable than historic averages in 45 percent of markets
Home prices were less affordable than their historic affordability averages in 184 out of 406 of the counties analyzed for the index (45 percent), down from 49 percent in the previous quarter but still up from 21 percent a year ago.

"Home prices are still increasing in Ohio, primarily due to shortage of inventory coupled with high demand, especially among first time homebuyers — mainly due to an increase in employment within the state," said Matthew Watercutter, senior regional vice president and broker of record for HER Realtors, covering the Dayton, Columbus and Cincinnati markets in Ohio, where 16 out 22 counties analyzed (73 percent) were less affordable than historic averages.

Infographic: Home affordability challenges spreading to middle-America

Buying a home requires highest share of wages in Brooklyn and Bay Area
Buying a median-priced home required the highest percentage of average wages in Kings County (Brooklyn), New York (125.8 percent), followed by Marin County (San Francisco), California (104.7 percent); Santa Cruz County, California (101.6 percent); Westchester County, New York (91.0 percent); and New York County (Manhattan), New York (90.8 percent).

Full report

About ATTOM Data Solutions
ATTOM Data Solutions is the curator of the ATTOM Data Warehouse, a multi-sourced national property database that blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, health hazards, neighborhood characteristics and other property characteristic data for more than 150 million U.S. residential and commercial properties. The ATTOM Data Warehouse delivers actionable data to businesses, consumers, government agencies, universities, policymakers including bulk file licenses, APIs and customized reports.

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SOURCE ATTOM Data Solutions

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