What kind of house can you afford? That, of course, depends on your income and how much mortgage you can take on. According to lending guidelines, your monthly housing expenses — including mortgage payments, property taxes, and insurance (as well as other relevant fees) — should not exceed 28% of your gross monthly income.
Nationwide, however, typical housing expenses amount to $1,930, or 32.3% of the average annual national wage of $71,708 this quarter, according to a report by real estate data company ATTOM. In fact, this figure exceeds 28% in 425 of the 590 counties ATTOM analyzed. And in nearly all counties, affordability was worse in the first quarter compared to historical averages. So where is affordability the worst?
To find the least affordable housing markets in the U.S., 24/7 Wall St. reviewed ATTOM’s 2024 U.S. Home Affordability Report. The report analyzed median home prices and average wage data from the Bureau of Labor Statistics in 590 U.S. counties to find the percentage of average wages needed to pay for major expenses on a median-priced home with a 30-year fixed-rate mortgage and a 20% down payment. 24/7 Wall St. listed here the 41 counties more than 60% of wages is required to afford a median-priced home. We broke ties using median sales price. ATTOM also calculated the income required to afford a median-priced home assuming a front-end debt-to-income ratio of 28% and 20% down payment.
Among the 41 least affordable counties, major expenses on median-priced homes account for anywhere from 60.1% to a whopping 109.5% — considerably higher than the 32.3% of wages expenses account for nationwide. In fact, the average wage earner in these counties would not qualify to buy a home there. Indeed, in 36 of the counties on the list, home sales price is greater than $500,000. (Also see: This City Has the Most Expensive Houses in America.)
The West region has the most counties on the list at 26, including 17 counties in California and three in Hawaii. Not surprising, Los Angeles, Monterey, Napa, and Santa Barbara are among the least affordable counties, as are Honolulu and Maui. The Northeast region is next with 11 counties on the list. The six in New York counties include four of New York City’s boroughs — Staten Island, Queens, Manhattan, and Brooklyn.