Buyers who were unscathed financially by the pandemic have particularly benefited from mortgage rates under 3%. However, the surging demand for a limited supply of homes for sale has fueled higher home prices. Housing affordability has been waning as a result.
In October, monthly mortgage payments rose by 3.1% while the median family income rose by just 0.7%, according to the National Association of REALTORS®’ housing affordability index.
Still, the average wage earner can afford the typical home across the U.S., according to a new report from ATTOM Data Solutions. “But the financial comfort zone continues shrinking as home prices keep soaring and mortgage rates tick upward,” says Todd Teta, chief product officer with ATTOM. “Historically low rates and rising wages are still big reasons why workers can meet or come very close to standard lending benchmarks in a majority of counties we analyze.”
Major homeownership expenses on a typical home are still affordable to average local wage earners in about half of the 575 counties analyzed, according to ATTOM Data researchers.
To learn more about the financial comfort zone and the home buying process, visit the SCOOP! Blog
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