ATTOM, a leading curator of land, property data, and real estate analytics, today released its first-quarter 2025 U.S. Home Affordability Report showing that median-priced single-family homes and condos remain less affordable in the first quarter of 2025 compared to historical averages in 97 percent of counties around the nation with enough data to analyze. The latest trend extends a three-year pattern of home ownership requiring historically large portions of wages as U.S. home prices stay at or near record levels.
The report also shows that major expenses on median-priced homes currently consume 32 percent of the average national wage. That level is virtually the same as in the fourth quarter of last year although about one percentage point up from a year ago, keeping the figure above the common 28 percent lending guideline preferred by lenders.
The current and historic affordability levels represent the latest measures of how home ownership remains a financial stretch for average workers around the nation. It comes as the national median home price has dipped slightly this quarter, to $351,000, during the typically slow Winter home-buying season. But with home mortgages rates still near 7 percent, the drop-off is too small to push the ratio of ownership expenses to wages back into the affordable range.
“Home affordability is in a holding pattern this quarter – financially stressful for average wage earners but not changing much. This is not unusual during the Winter lull when home prices level out. A recent small decline in mortgage rates surely hasn’t hurt either for fledgling buyers,”, said Rob Barber, CEO for ATTOM. “If history is a good guide, prices will rise as we head into the peak buying season that’s about to start, which will worsen affordability measures.”
But he added that “with so much economic uncertainty these days connected to investment markets, federal policy shifts and very mixed economic forecasts, it is anyone’s guess how much prices will move.”
The latest numbers represent a modest addition to a four-year pattern of annual changes in major expenses on typical single-family homes and condos outpacing changes in average wages around the country. Expense totals have either grown faster or declined less than wages during 14 of the last 16 quarters dating back to early 2021, pushing affordability in the wrong direction for house hunters.
The report determines affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage payments, property taxes and insurance — on a median-priced single-family home, assuming a 20 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio. That required income is measured against annualized average weekly wage data from the U.S. Bureau of Labor Statistics (see full methodology below).
Compared to historical levels, median home ownership costs in 554 of the 574 counties analyzed in the first quarter of 2025 are less affordable than in the past. That is down slightly from both the fourth and first quarters of 2024. During those time periods, 563 and 562 of the same group of counties were considered historically unaffordable, respectively.
Historic measures remain negative as the portion of average local wages consumed by major home-ownership expenses on typical homes are considered unaffordable during the first quarter of 2025 in about three-quarters of the 574 counties in the report, based on the 28 percent guideline. Counties with the largest populations that are unaffordable in the first quarter are Los Angeles County, CA; Maricopa County (Phoenix), AZ; San Diego County, CA; Orange County, CA (outside Los Angeles) and Miami-Dade County, FL.
On the flip side, the most populous of the counties with affordable levels of major expenses on median-priced homes during the first quarter of 2025 are Cook County (Chicago), IL; Harris County (Houston), TX; Wayne County (Detroit), MI; Philadelphia County, PA, and Cuyahoga County (Cleveland), OH.
