Home affordability has slipped below historical norms in 98% of the U.S. counties ATTOM tracks. In the third quarter, homes in 570 of 583 counties were less affordable than their own long-term averages, according to a press release from ATTOM on PR Newswire. Prices aren’t the cause. Borrowing costs are.
Home affordability is a mortgage-rate problem, not a price problem
ATTOM’s report prices the monthly cost of owning a median-priced home. That covers the mortgage payment, mortgage insurance, property taxes and homeowners insurance. It assumes 20% down and a 30-year fixed loan. Then it asks what share of the typical local paycheck that eats up, using the 28% of income rule of thumb.
Nationally, that bill takes 31.8% of the typical worker’s wages. The median home price was $368,000, and you need about $90,191 a year to afford it. The average national wage is $79,534, which leaves a gap of roughly $10,650.
In 467 counties, or 80.1%, the monthly cost beat what the typical resident earns under the 28% rule. Worse, in 180 counties it topped 43% of wages, which ATTOM labels seriously unaffordable. The cost of buying a home is stretching paychecks almost everywhere you look.
Prices are not the culprit. The national median price fell 1% from the second quarter and 2% from a year ago. Buyers still lose, because the mortgage rate does the real damage. Freddie Mac’s 30-year rate hit 7.28% on Oct. 1, the highest since November 2023. A year ago it was 6.19%.
Insurance and taxes pile on. ATTOM’s CEO, Rob Barber, said affordability stayed a challenge “even as some of the underlying factors moved in a favorable direction.” Prices slipped, and wages beat prices in 343 counties. It still wasn’t enough. The same squeeze shows up elsewhere: pending home sales hit a record low as rates neared 7.4%.
Housing affordability depends on your zip code
Here’s the thing: your zip code decides your pain. In Orange County, California, the typical owner would spend 92.6% of wages on housing. In Los Angeles County, it’s 69.9%. In Kings County, New York, it’s 114.1%, which means the typical wage doesn’t even cover the bill (math that does not math). California holds 12 of the 25 least affordable counties.
Meanwhile, some big counties still pass the test. Harris County, Texas, sits at 20.7%. Dallas County is at 24.3%, Philadelphia at 20.2%, and Wayne County, Michigan, at 17.9%. Bexar County, Texas, squeaks by at 27.2%.
Affordable homes still exist, just not on the coasts.
Texas also shows up on the other list. Measured against their own history, the five worst counties are all in Texas, led by Cameron County at an index of 23. So Texas has homes that are cheap by national standards and still expensive by local ones. Buyers there are feeling it, though bidding wars have faded across the state.
Homebuying costs won’t ease until rates do
Strip away the county-by-county detail and the story is simple. A slight dip in rates this week doesn’t change the math when borrowing still costs more than a point above last year. Home prices have already given a little. The monthly payment hasn’t followed.
If you’re shopping, run your own numbers. Price the full monthly payment, not just the loan, and check what insurance and property taxes look like in your county. Because homebuying costs vary so much by location, some buyers are walking away, and cancellations are near record highs.
Waiting for a better deal? Wait for lower rates, because prices alone won’t rescue you. The market didn’t break this quarter. It just never healed.
