Published by REALTOR.com | July 3, 2024
Expenses associated with owning a home—including the mortgage, homeowners insurance, and real estate taxes—now take up 35.1% of a homeowner’s take-home pay
Home affordability is at its lowest point since 2007, according to a new report from ATTOM Data Solutions.
Expenses associated with owning a home—including the mortgage, homeowners insurance, and real estate taxes—now take up 35.1% of a homeowner’s take-home pay, according to the report from the property data analytics firm.
That percentage is up from 32.1% this time last year, and well over the 28% most lenders use as a guideline when it comes to qualifying for a mortgage.
In some places around the country, that number is even higher. ATTOM notes that more than a third of the country is spending 43% of their wages on their home.
“The latest affordability data presents a clear challenge for home buyers. While home prices are increasing and mortgage rates remain relatively high, these factors are making homes less affordable,” Rob Barber, CEO of ATTOM, wrote in the report. “It’s common for these trends to intensify during the spring buying season when buyer demand increases. However, the trends this year are particularly challenging for house hunters, more so than at any point since the housing market boom began in 2012.”
Part of the problem is that wages aren’t keeping pace with residential real estate prices.
ATTOM notes that annual home prices increased at a much faster rate than wages in nearly half of the counties included in the report. Some of the places where those gaps were most evident included Los Angeles County in California, Cook County in Illinois, and Maricopa County in Arizona.
And it’s not just the monthly mortgage payment that is hitting homeowners harder than usual; home upkeep costs are ticking up as well. With those figures included, homeowners are spending 43% of their wages on their home, something ATTOM considers “seriously unaffordable.”
