The average El Paso County resident needs 41.6 percent of their annual income to buy a home.
That information was revealed in ATTOM Data Solutions’ Q3 2019 home affordability report, which shows that median home prices in the third quarter of 2019 were not affordable for average wage earners in 371 of 498 counties, or 74 percent, analyzed in the report.
According to the data, the median sales price of a home in El Paso County during the quarter was $312,000. Compared with the third quarter of last year, the median home price increased 8.5 percent.
During the same period, annualized weekly wages averaged $50,869 and grew only 3.2 percent.
Those figures placed El Paso County among 76 percent of markets where home price appreciation outpaced wage growth and among 67 percent of markets that require at least 30 percent of wages to buy a home.
The report also looked at whether homes are more or less affordable than historic averages and calculated an affordability index.
El Paso County scored 85 on the Q3 affordability index. A score under 100 indicates less affordability in Q3 than the historic average.
Among the 498 counties surveyed, homes in 304, or 61 percent, were less affordable than historic averages, while 39 percent were more affordable than historic averages.
The nationwide median home price of $265,000 in the third quarter of 2019 would require an annual gross income of $69,256 for a buyer putting 3 percent down and not exceeding the recommended “front-end” debt-to-income ratio of 28 percent — meaning the buyer would not be spending more than 28 percent of his or her income on the house payment, including mortgage, property taxes and insurance.
That required income is higher than the $57,694 annual income earned by an average wage earner based on the most recent average weekly wage data available from the Bureau of Labor Statistics, making a median-priced home nationwide not affordable for an average wage earner.
“Buying a home continues to be a rough road to navigate for the average wage earner in the United States,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Prices are going up substantially faster than earnings in 2019 without any immediate end in sight, which continues to make home ownership difficult or impossible for a majority of single-income households and even for many families with two incomes.
“If there is any silver lining to the picture, it’s that mortgage rates have fallen back to historic lows. That’s softening the blow of rising prices and actually making home ownership a bit more attainable in most areas of the country.”
The largest populated counties where a median-priced home in the third quarter of 2019 was not affordable for average wage earners included Los Angeles, San Diego and Orange counties in California; Cook County (Chicago), Ill.; and Maricopa County (Phoenix), Ariz. Those same counties were in the top five in Q2 2019.
The 127 counties (26 percent of the 498 counties analyzed in the report) where a median-priced home in the third quarter of 2019 was still affordable for average wage earners included Harris County (Houston), Tex.; Wayne County (Detroit), Mich.; Philadelphia County, Pa.; Cuyahoga County (Cleveland), Ohio; and Allegany County (Columbus), Ohio.
The full report can be viewed here.