Average U.S. Incomes Won’t Support Buying Average Homes

Image source freeimages.com

Property data provider ATTOM’s third-quarter Home Affordability Report for 2019 painted a picture of a U.S. housing market where an average income will not buy an average home. 

Todd Teta of ATTOM stated that “Buying a home continues to be a rough road to navigate for the average wage earner in the United States. Prices are going up substantially faster than earnings in 2019 without any immediate end in sight, which continues to make home ownership difficult or impossible for a majority of single-income households and even for many families with two incomes.” 

What the Report Measures

For the report, estimated house payments were based on a 3 percent down payment and a thirty-year fixed rate mortgage with average interest rates, and included property taxes and insurance.  In order to spend less than 28 percent of their income on a median-priced home of $265,000, buyers would need an annual income of $69,256. Wage data from the Bureau of Labor and Statistics, though, reveals that the national average annual income of $57, 694 falls more than $10,000 short.

Locally, out of 498 counties analyzed, 74 percent had a median home price that was not affordable for workers earning an average wage. Further, home prices in two-thirds of those counties would result in payments of at least 30 percent of average wages.

More than half of the markets (61 percent) had less affordable housing than they have had historically, on average.  That number, however, is down from 73 percent a year ago (2018 third quarter).

Home Ownership: Difficult But Worth It

Today’s home buyers have fewer assets than previous generations. Buying a home can be tricky when you’re just trying to make ends meet from month to month. But in our economic system, home ownership can be worth the sacrifice because it’s such a great tool for long-term wealth building. To learn why, we invite you to check out our three-post series on economic cycles (part one, two and three).

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest
Share on email
Email
Share on reddit
Reddit
Share on print
Print
Share on google
Google+

Leave a comment

What’s Happening in the News: Early September, 2020

Whether you’re in the market for a charming fixer-upper, in need of mortgage help, adding solar or smart home technology to your house, or looking to change the world through your investments, there’s something for everyone in today’s roundup!

Read More »

Having an Attainable Home, at the end of the day, is an idea. An idea that everyone has the right and the chance to work hard, live comfortably, and have prosperity throughout their life, and we’re happy to say that it’s still possible.

Subscribe to our news & updates

Attainable Home's content is for educational and informational purposes only and should not be taken as professional legal or financial advice. If you feel you need advice, you must consult a professional licensed in the appropriate field. While we do our best to keep these updated, things can change sometimes. Our primary purpose is to help others by providing great content and resources, and we may also have relationships and sources listed on the website that may result in compensation to our company in some form, as our company needs to be financially sustainable by paying all authors well and supporting the online systems. All views and writing are also solely the opinions of the authors and may or may not fully represent the view of the company's.