30% of population lives in areas requiring an income of $100,000 or more to buy a home
.jpg)
Home affordability has hit its lowest level in a decade, with 30% of the population living in markets requiring an annual income of $100,000 or more to buy a home.
According to a recent home affordability study by ATTOM Data Solutions, affordability hasn’t been this low since the third quarter of 2008. The report calculates an affordability index based on the percentage of income needed to buy a median-priced home relative to historic averages. An index above 100 indicates that home prices are more affordable than the historic average, while an index below 100 means home prices are less affordable than the historic average.
Nationally, the affordability index for Q3 was 92, down from 95 in Q2 and 102 in Q3 of 2017. Among 440 counties analyzed for the report, 344 (78%) had affordability indexes below 100, the highest percentage of counties below historic affordability since the third quarter of 2008.
“Rising mortgage rates have pushed home prices to the least affordable level we’ve seen in 10 years, both nationally and at the local level,” said Daren Blomquist, senior vice president of ATTOM Data Solutions. “Close to one third of the US population now lives in counties where buying a median-priced home requires at least $100,000 in annual income based on our analysis of 440 counties with a combined population of 220 million. US Census net migration data shows negative net migration in more than two thirds of those highest-priced markets, while more than three quarters of markets requiring annual income less than $100,000 to buy a home posted positive net migration, indicating that home affordability is at least one factor driving recent migration patterns.”
The least affordable counties were in California. San Mateo, where a $377,210 annual income is needed to buy a median-priced home, topped the list. It was followed by San Francisco ($366,582), Santa Clara ($327,284), Marin ($311,827) and Alameda ($237,760).
