Now Owning A House In US Is More Challenging Than Ever As Affordability Drops To Lowest Level Since 2007: Report

The affordability of homes in the U.S. has hit its lowest point in 17 years, making it more challenging for average earners to own a home than at any time since 2007.

What Happened: Data from Attom reveals that the costs of a typical home, including mortgage payments, property insurance, and taxes, consumed 35.1% of the average wage in the second quarter. This is a significant increase from 32.1% a year earlier, Bloomberg reported on Wednesday.

With mortgage rates hovering around 7% and a surge in expenses outpacing income gains, home ownership has become increasingly unaffordable. The shortage of listings has pushed the median home price to a record $360,000. In over a third of U.S. markets, ownership costs devoured 43% of average local wages, well above the 28% guideline for affordability.

“The latest data presents a clear challenge for homebuyers,” said Rob Barber, CEO of Attom. He noted that these trends usually intensify during the spring buying season, but this year’s trends are particularly challenging.

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Markets in the West and Northeast experienced the largest drops in affordability, including areas in California and New York. Out of the 589 counties analyzed, 582 (98.8%) were less affordable in the second quarter than their historical affordability averages.

Why It Matters: These recent findings align with previous reports that indicated a slowdown in the housing market. In May, U.S. home prices reached a record high despite a slow market. By June, the housing market took a further hit with starts at their lowest since the pandemic, as high rates discouraged builders and buyers.

The current state of home affordability in the US underscores the challenges facing potential homebuyers, particularly average earners. This trend could have significant implications for the broader economy if it continues.

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Image via Midjourney

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari