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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 70 August 2024 J O U R N A L In order to determine affordability for average wage earners, the report cal- culated the monthly income required to cover the major costs of home ownership, such as property taxes, insurance, and mortgage payments, on a median-priced single-family home. This calculation was based on the assumption of a 20% down payment and a maximum "front-end" debt-to-income ratio of 28%. The annual- ized average weekly wage data from the U.S. Bureau of Labor Statistics was then compared to that required income. In 582 of the 589 counties examined in the second quarter of 2024, the median cost of home ownership was lower than it had ever been. Compared to 579 of the same counties in the first quarter of this year and 577 in the second quarter of last year, that figure was just marginally higher. However, it was over fifteen times higher than the early 2021 figure. Meanwhile, the portion of aver- age local wages consumed by major home-ownership expenses on typical homes was considered unaffordable during Q2 of 2024 in about 80% of the 589 counties in the report, based on the 28% guideline. Counties with the largest populations that were unaffordable in the second quarter were Los Angeles County; Cook County (Chicago); Marico- pa County (Phoenix), Arizona; San Diego County; and Orange County, California (outside Los Angeles). The most populous of the 115 counties with affordable levels of major expenses on median-priced homes during the second quarter of 2024 were Harris County (Houston), Texas; Wayne County (Detroit), Michigan; Philadelphia County, Pennsylvania; Cuyahoga County (Cleveland), Ohio, and Allegheny County (Pittsburgh), Pennsylvania. National Median Home Price Jumps Quarterly In the second quarter of 2024, the national median price for single-fam- ily homes and condos skyrocketed to $360,000, a whole $15,000 higher than the previous peak of $345,000 set in the spring of 2022. The most recent amount was higher than $335,500 in 2024's first quarter and $344,000 in the previous year's second quarter. Market Trends Q2 HOME PRICE HIKES TIGHTENS AFFORDABILITY I n 99% of the counties in the country with sufficient data for analysis, median-priced single-family homes and condominiums remained less affordable in the second quarter of 2024 compared to historical norms, according to ATTOM's second-quarter 2024 U.S. Home Affordability Report. The most recent trend followed a pattern that began in early 2022 and has continued to this day where owning a home nationwide has historically required a sizable amount of salaries due to high residential mortgage rates and persistently high property prices. The survey also reveals that in the second quarter, significant costs associ- ated with median-priced residences ac- counted for 35.1% of the average national wage, which is higher than the standard lending guideline of 28% and represents the highest level since 2007. The historical and present measure- ments both showed quarterly and annual declines after a small uptick from late 2023 to early 2024. The changes occurred during the spring purchasing season, when the national median home price surged to a record high of $360,000 while mortgage rates stayed at roughly 7%. As a result, the rising cost of homeowner- ship exceeded recent improvements in salaries. Therefore, compared to the first quarter of this year and the second quar- ter of last year, the proportion of average wages required nationwide for normal mortgage payments, property taxes, and insurance increased by around three percentage points. "The latest affordability data presents a clear challenge for home buyers," said Rob Barber, CEO for ATTOM. "While home prices are increasing and mortgage rates remain relatively high, these factors are making homes less affordable. It's common for these trends to intensify during the Spring buying season when buyer demand increases. However, the trends this year are particularly challeng- ing for house hunters, more so than at any point since the housing market boom began in 2012. As the 2024 buying season progresses into the Summer, we will con- tinue to monitor the data closely." Throughout the months of April through June, the national median home price increased by 4.7% annually and 7.3% quarterly. The average 30-year house mortgage rate, which ended the quarter at roughly 6.9%, or more than twice where they stood in 2021, further hurt buyers during the second quarter. Following a modest decline in the previous two quarters, these variables contributed to an approximately 10% increase in house ownership expenses in the second quarter of 2024.