U.S. homeownership slightly more affordable in Q1 2023.

ATTOM released its first-quarter U.S. Home Affordability Report showing buying conditions for house hunters may be improving as the portion of average wages nationwide required for typical major home-ownership expenses has fallen slightly to 30 percent. But the report also noted median-priced single-family homes and condos are less affordable in the first quarter compared to historical averages in 94 percent of counties across the nation with enough data to analyze – far above the 62 percent of counties that were historically less affordable in the first quarter of 2022. The latest percentage is still considered unaffordable by common lending standards, which call for a 28 percent debt- to-income ratio. It also remains well above the 25 percent level in the first quarter 2022. But the portion has inched downward from 31 percent in the final months of last year. The nationwide median single-family home and condo price is up less than 1 percent from fourth quarter 2022 to the first quarter — now sitting at $320,000 — while three quarters of local markets continue to see prices slip this year. Those trends have followed an 8 percent decrease in the nationwide median during the second half of 2022. The drop-off has come as rising interest rates, high consumer-price inflation and stock market declines have cut into what home seekers can afford or the resources they have for down payments. At the same time, wages have risen 6 percent nationwide over the past year, with increases continuing into the second half of 2022 in most of the country. “The soaring housing market has finally come back down in much of the U.S., at least for now, while worker pay is growing. That’s produced some benefits for home seekers in the form of slightly better affordability, especially as lending rates have flattened out,” said Rob Barber, chief executive officer of ATTOM. “Things certainly haven’t swung way back into friendly territory. Price drops and wage gains haven’t yet translated into equal improvements in affordability. And the trend could go back the other way if interest rates go up again, as expected. But the scenario is becoming more favorable for buyers.”


Source: ATTOM