ATTOM Data Solutions on Thursday released its first-quarter 2020 U.S. Home Affordability Report, which shows that median home prices in the first quarter of 2020 were unaffordable for average wage earners in 319 of 483, or 66% of the U.S. counties analyzed in the report. But that figure is down from 70.4% in the fourth quarter of 2019 and 69.8% from the first quarter of 2019.
The report also shows that owning a median-priced home in the first quarter of 2020 in the United States – costing $252,500 – consumed 31.1% of the national average wage. That percentage is down from 31.4% in the fourth quarter of 2019 and 31.6% in the first quarter of 2019, to the lowest percentage since the fourth quarter of 2017, when the average workers were spending 30.8% of wages to own a home.
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% maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics.