Buying a house gets more affordable
Though the start of 2020 has had its challenges, it also has a new silver lining: increased housing affordability. According to a new report, the share of wages it takes to buy a house is down over the year, putting a home purchase closer into reach for many.
Housing affordability improves
The new 2020 U.S. Home Affordability Report from ATTOM Data Solutions shows that it takes about 31.1% of the average American’s income to buy a house. That’s down from 31.6% in 2019 and the lowest share of wages since the end of 2017.
According to Todd Teta, ATTOM’s chief product officer, the increase in affordability stems largely from today’s historically low interest rates.
“Home affordability has inched ahead this year across the United States as buying a house or a condo gets closer and closer to the level where the average wage earner can swing the deal within standard lending guidelines,” Teta said. “While the national median price still remains a bit out of reach for the average wage earner, the affordability gap has narrowed to the smallest point in more than two years.”
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Where housing affordability is highest
Some of the best places for housing affordability include Baltimore City, Maryland; Madison County, Indiana; and Bibb County, Georgia. In Baltimore City, it takes just a 9.5% of the typical resident’s income to buy a house, while in Madison County, it’s 10.8%.
The least affordable market is Kings County, New York, where a home purchase requires over 100% of the average wages. Other unaffordable spots also include Santa Cruz, Marin, and Monterey County, Calif., and Maui County, Hawaii.
Of course, the spread of coronavirus could influence housing affordability across the country.
“All that may change in a huge way over the next few months as the impact of the coronavirus hits the housing market,” Teta said. “We are entering a period of great uncertainty, but in the initial months of the year, the picture has appeared to continue to brighten for home seekers.”
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Get today’s mortgage rates
Are you looking to take advantage of increasing housing affordability in your area? Then shop around and see what mortgage rates you qualify for today.