2020 U.S. Home Affordability Report, showing that median home prices of single family homes and condos in the second quarter of 2020 are more affordable than historical averages in 49 percent of U.S. counties with enough data to analyze, up from 31 percent a year ago.
The report determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments — including mortgage, property taxes and insurance — on a median-priced home, assuming a 3 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics (see full methodology below).
Compared to historical levels, 200 of the 406 counties analyzed in the second quarter are now more affordable, up from 126 of the same group of counties in the second quarter of 2019. The gains have come as higher wages, along with cheaper mortgage costs resulting from declining interest rates, outweigh ongoing price increases that commonly have exceeded 5 percent in the current quarter.
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