The inventory crisis has appeared to not only lead to higher prices but even more so less affordability for the median-price single-family home. For the third quarter of 2023 99% of the counties in the country appeared to have grown less affordable, according to ATTOM data.
Along with high interest rates and higher home prices, inflation continues to take a greater chunk out of the typical home budget. According to this recent report, the median price for a single-family home has increased to over $351,000. This trend has now capped an ever-increasing trend for the last 11 years, but now the cost of owning a home is increasing faster than wages in most markets in the United States. Currently homeownership now represents over 1/3 of the average salary of the homeowner. This trend does not appear to be plateauing at this time. This report points to home prices increasing in 574 of the 578 counties that were reviewed by the report. The prior report indicated that only 568 of the counties increased in price.
As can be expected California led the way with respect to unaffordability, with Los Angeles County, Cook County, San Diego County and Orange County representing four of the top five most expensive counties to own a home. The counties in which there were homes that were affordable were located in Harris County in Texas, Wayne County in Michigan, Philadelphia County in Pennsylvania, and Cayuga County in Ohio.
According to this report, it now required an annual salary of $75,000 necessary to afford a typical home in over 50% of the counties analyzed. Unaffordability continues to be the worst it has ever been in the last 16 years.