Median-priced single-family homes and condos continued to be less affordable than average historical levels in the fourth quarter of 2024, thanks to home prices rising to a new record high.
The national median price for single-family homes and condos increased to $364,750 in the fourth quarter, a 2.1% increase over the third quarter of this year, and 11.4% over the median price in the fourth quarter of 2023.
Below-average affordability was found 98% of counties across the country where there’s enough data for analysis, according to ATTOM, a provider of land and property data and real estate analytics, in its fourth-quarter 2024 U.S. Home Affordability Report.
The data reveals a continuing a three-year trend where home ownership requires a historically large portions of wages, ATTOM reported in a news release.
Additionally, major expenses on median-priced homes consume 34% of the average national wage. That’s up more than 1 percentage point for the quarterly and annually. Lenders commonly set a lending guideline of 28%.
The affordability downturn demonstrates that home ownership is a financial stretch for average workers across the country, according to ATTOM.
While the national median home price rose to $364,750 this quarter, mortgage rates remain over 6% despite declining.
The portion of average wages needed for typical mortgage payments, property taxes and insurance currently is almost 13 points beyond a low point reached early in 2021, just before home-mortgage interest rates surged from the lowest levels in decades.
“The U.S. housing market continues to generate great profits for most home sellers but also more and more financial stress for would-be buyers,” said Rob Barber, CEO for ATTOM. “Average workers now must shell out a larger portion of their wages for major home-ownership expenses than at any time since right before the housing market tanked in the late 2000s. Despite recent declines in mortgage rates, down payments on typical home purchases have reached four times the average national wage.”
Barber added that “at some point, something’s got to give, or a growing number of buyers will have no choice but to toss in the towel and wait for home ownership to become more affordable. But we clearly are not there yet.”
