BIG DATA SANDBOX
THE SEARCH TO BUY A HOME According to the ATTOM Data Solutions Q2 2019 Home Affordability Index, annual home price appreciation increased less than five percent in the second quarter of 2019, which is one of the more moderate annual gains we’ve seen, compared to previous quarters. This, coupled with mortgage rates slowing and annual wage growth slowly increasing, makes for a competitive housing market but still one that remains less affordable for the average wage earner.
KEY:
COUNTIES AFFORDABLE FOR THE AVERAGE WAGE EARNER TO BUY A HOME COUNTIES NOT AFFORDABLE FOR THE AVERAGE WAGE EARNER TO BUY A HOME
Avg Annualized Weekly Wages
Annual Income Needed to Buy a Home
REPORT METHODOLOGY : The ATTOM Data Solutions U.S. Home Affordability Index ana- lyzes median home prices derived from publicly recorded sales deed data collected by ATTOM Data Solutions and average wage data from the U.S. Bureau of Labor Statistics in 480 U.S. counties with a combined population of more than 234 million. The affordability index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate mortgage and a three percent down payment, including property taxes, home insurance and mortgage insurance. Average 30-year fixed interest rates from the Fred- die Mac Primary Mortgage Market Survey were used to calculate the monthly house payments. The report determined affordability for average wage earners by calculating the amount of in- come needed to make monthly house payments — including mortgage, property taxes and insur- ance — on a median-priced home, assuming a three 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 three percent down and not ex- ceeding 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, includ- ing mortgage, property taxes and insurance. That required income is higher than the $57,278 an- nual income earned by an average wage earner based on the most recent average weekly wage data available from the Bureau of Labor Statis- tics, making a median-priced home nationwide not affordable for an average wage earner. •
WAYNE COUNTY, MICHIGAN
$ 61,529 $ 29,018
FRANKLIN COUNTY, OHIO
HARRIS COUNTY, TEXAS
$ 70,499 $ 69,655
$ 55,822 $ 54,571
CUYAHOGA COUNTY, OHIO
$ 57,369 $ 38,350
PHILADELPHIA COUNTY, PENNSYLVANIA
COOK COUNTY, ILLINOIS
$ 67,535 $ 69,835
$ 65,390 $ 44,385
LOS ANGELES COUNTY, CALIFORNIA
MARICOPA COUNTY, ARIZONA
ORANGE COUNTY, CALIFORNIA
$ 54,340 $ 69,922
$ 64,831 $ 156,642
$ 62,699 $ 188,876
SAN DIEGO COUNTY, CALIFORNIA
$ 61,776 $ 146,828
32 think realty housing news report
september 2019 33
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