New report puts home affordability in perspective

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by Paul Gatling ([email protected]) October 15, 2023 10:14 am 826 views 

A new report from California-based Attom Data Solutions shows that home ownership is getting more difficult for average U.S. wage earners.

The company’s third-quarter 2023 U.S. Home Affordability Report found that an average of 34.6% of a person’s paycheck goes toward paying the mortgage and housing expenses. That is considered unaffordable by common lending standards, which call for a 28% debt-to-income ratio.

It marks the highest level since 2007 and stands well above 21% from early 2021, right before residential mortgage rates began shooting up from historic lows.

In Arkansas, Attom’s data shows that the average household income in Benton County is $73,112, and the median home price is $335,000. Those are the highest figures among the six Arkansas counties included in the report. So, the average wage earner in Benton County would need to spend 30.7% of their income to secure a mortgage on a median-priced home.

Based on the data, here’s where rates stand around Arkansas, according to Attom:

  • Benton County: 30.7% of wages needed to buy a home. Wages are down 2%, and median home prices are down 1% in the past year.
  • Faulkner County: 32.8% of wages needed to buy a home. Wages are up 4%, and median home prices are up 2% in the past year.
  • Pulaski County: 22.7% of wages needed to buy a home. Wages are up 4%, and median home prices are up 5% in the past year.
  • Saline County: 32.6% of wages needed to buy a home. Wages are up 6%, and median home prices are up 1% in the past year.
  • Sebastian County: 22.1% of wages needed to buy a home. Wages are up 6%, and median home prices are unchanged in the past year.
  • Washington County: 37% of wages needed to buy a home. Wages are up 2%, and median home prices are up 4% in the past year.

“The dynamics influencing the U.S. housing market appear to continuously work against everyday Americans, potentially to the point where they could start to have a significant impact on home prices,” Attom CEO Rob Barber said. “We will see how this shakes out as the peak 2023 buying season winds down.”