IRVINE, CA — U.S. home affordability challenges persist as 97 percent of counties analyzed in ATTOM’s first-quarter 2025 U.S. Home Affordability Report remain less affordable compared to historical averages. This marks a continuation of a three-year trend where homeownership consumes a growing portion of wages, fueled by high home prices and elevated mortgage rates near 7 percent.
The report highlights that major homeownership expenses for median-priced single-family homes and condos now account for 32 percent of average national wages. Although this figure is consistent with last quarter, it has risen roughly one percentage point since the same period last year, surpassing the 28 percent affordability benchmark preferred by lenders.
“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,” remarked Rob Barber, CEO of 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.”
Median home prices saw a slight quarterly dip of 1 percent to $351,000 during the slower winter sales period. However, prices are still up 5.2 percent annually, continuing a four-year pattern where homeownership costs outpace wage growth in most U.S. counties. Over 72 percent of markets analyzed reported annual price increases in the first quarter of 2025.
Among counties with the greatest affordability challenges were Los Angeles County, CA; Maricopa County, AZ; and Miami-Dade County, FL, where homeownership costs eclipsed the 28 percent wage benchmark. On the other end, counties like Cook County, IL (Chicago) and Wayne County, MI (Detroit) remained more affordable, with ownership costs consuming less than 28 percent of local wages.
The widespread affordability issues leave the average homebuyer needing $86,611 in annual income to purchase a median-priced home, nearly 16 percent higher than the national average wage of $74,698. This affordability gap is particularly acute in high-cost coastal regions. For example, in Manhattan, NY, buyers require $386,282 annually, while Mercer County, PA, remains among the most affordable, with $20,028 needed for homeownership.
Despite the challenges, ATTOM’s analysis shows improving affordability in a few markets compared to the previous quarter, though the overall trend points to continued financial strain for U.S. homebuyers. With the spring buying season on the horizon, rising prices and economic uncertainties may further impact affordability across the nation.
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