How Much Do You Need to Earn to Buy a Home Near You?

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According to ATTOM Data Solutions’ just released Q2 2019 U.S. Home Affordability Report, median home prices in the second quarter of 2019 were not affordable for average wage earners in 74 percent (353 of 480) of U.S. counties analyzed in the report. If you are interested in learning more about our detailed housing statistics on home affordability, click here.

In Q2 2019, the largest populated counties where a median-priced home was not affordable for average wage earners included Los Angeles County, California; Cook County (Chicago), Illinois; Maricopa County (Phoenix), Arizona; San Diego County, California; and Orange County, California.

The report noted that 26 percent (127 of 480) of the U.S. counties analyzed were still affordable for average wage earners in Q2 2019, including Harris County (Houston), Texas; Wayne County (Detroit), Michigan; Philadelphia County, Pennsylvania; Cuyahoga County (Cleveland), Ohio; and Franklin County (Columbus), Ohio.

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 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio.

For instance, the nationwide median home price of $255,000 in the second quarter of 2019 would require an annual gross income of $69,366 for a buyer putting 3 percent down and not exceeding the recommended “front-end” debt-to-income ratio of 28 percent — meaning the buyer would not be spending more than 28 percent of his or her income on the house payment, including mortgage, property taxes and insurance. That required income is higher than the $57,278 annual income earned by an average wage earner based on the most recent average weekly wage data available from the Bureau of Labor Statistics, making a median-priced home nationwide not affordable for an average wage earner. 

According to the report, 67 percent (323 of 480) of the U.S. counties analyzed required over 30 percent of their annualized weekly wages to buy a home in Q2 2019. The counties that required the greatest percent of wages were Marin County (San Francisco), California (116.8 percent of annualized weekly wages needed to buy a home); Kings County, New York (113.4 percent); Santa Cruz County, California (112.3 percent); San Luis Obispo County, California (91.4 percent); and Maui County, Hawaii (88.2 percent).

Here are the top ten counties that required over 30 percent of their annualized weekly wages to buy a home:

On opposite end of the spectrum, 33 percent (157 of 480) of the U.S. counties analyzed in the report required less than 30 percent of their annualized weekly wages to buy a home in Q2 2019. The counties that required the smallest percent were Bibb County (Macon), Georgia (12.9 percent of annualized weekly wages needed to buy a home); Wayne County (Detroit), Michigan (13.2 percent); Baltimore City, Maryland (13.6 percent); Rock Island County (Davenport), Illinois (14.9 percent); and Allen County (Lima), Ohio (14.9 percent).

Here are the top ten counties that required less than 30 percent of their annualized weekly wages to buy a home:

Want to see how your area ranks in home affordability? Contact us now to see how you can get this data!

Please contact us if you have questions about the underlying data referenced in this article, or would like to have access to that data in the form of custom reports, API, Bulk File or DaaS.

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