Last month, the median home listing price reached $435,000, a slight, $5,000 decrease compared to July. While down from June 2022’s record high of $449,000, home prices remain about as high as they’ve ever been in this country. Just five years ago, the typical listing price for a home in August was about $300,000. (These are the states where home values increased the most during COVID.)
To find the 25 counties where homes are most affordable, 24/7 Wall St. reviewed U.S. Home Affordability Report for the first quarter of 2023 ATTOM, a property data provider. The report determined affordability for average wage earners in 572 counties by calculating the amount of income needed for major home ownership expenses on a median-priced home, assuming a loan of 80% of the purchase price and a 28% maximum “front-end” debt-to-income ratio. Counties are ranked by the percent of annual wages needed to afford median monthly housing costs.
In all of the counties with the most affordable homes, the percentage of average local wages needed to cover homeownership costs is below 17%, considerably below the 29.9% nationwide standard.
Most of the counties on this list are in the Midwest, the South, and the mid-Atlantic, with five each in Illinois and Pennsylvania. Many of the counties are smaller, with populations under 200,000. However, a few larger outliers are Philadelphia County, Pennsylvania, with a population of 1.6 million, and Wayne County, Michigan, with a population nearing 1.8 million. (These are the cities where people need the smallest downpayments to buy their home)
The report also calculated the wage required to afford a median-priced home. The median home price of $320,000 in the first quarter of 2023 requires an annual wage of $78,416, based on the same assumptions, higher than the average annual wage nationwide of $70,460. In all the counties on this list, the required annual wage is lower than the local average wage and is below $35,200.
Click here to see the counties with the most affordable homes in America.
Click here to read our detailed methodology.
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