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Issue link: http://digital.themreport.com/i/1481918
M R EP O RT | 49 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION homebuyers, and threaten to stall or reverse a nearly unrelenting rise in home values that began when the market started recovering in 2012 from the Great Recession of the late 2000s. Amid those mixed trends, major home-ownership expenses on typi- cal homes are still unaffordable to average local wage earners during Q 3 of 2022 in 400—or 69%—of the 581 counties in the report, based on the 28% guideline. Counties with the largest populations that are unaffordable in Q 3 are: • Los Angeles County, California • Maricopa County (Phoenix), Arizona • San Diego County, California • Orange County, (outside Los Angeles) California • Kings County (Brooklyn), New York Median single-family home and condo prices in Q 3 of 2022 are up by at least 10% over Q 3 of 2021 in 302—or 52—of the 581 counties included in the report. However, typical values have dropped from the second to Q 3 in 230—or 40%—of those counties, which has contributed to the nationwide decrease. "Home price appreciation has slowed dramatically in most markets—and there are even price corrections in some areas—as home sales have declined signifi- cantly over the past few months," Sharga said. "But mortgage rates have risen more rapidly and dra- matically than they have in several decades, and as a result a monthly mortgage payment today is 35-45% higher than a year ago, making af- fordability too much of a challenge for many would-be buyers." Annual Price Gains Still Outpacing Wage Growth in More Than 80% of Markets Annual home-price apprecia- tion has been greater than weekly annualized wage growth in Q 3 of 2022 in 488 of the 581 coun- ties analyzed in the report—or 84%—with the largest including Los Angeles County, California; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; San Diego County, California, and Orange County, California (outside Los Angeles). Average annualized wage growth has surpassed home-price appreciation in Q 3 of 2022 in only 93—or 17%—of the counties in the report. The largest of those counties include Cook County, (Chicago), Illinois; King County (Seattle), Washington; Santa Clara County (San Jose), California; Alameda County (Oakland), California, and Philadelphia County, Pennsylvania. Share of Wages Needed for Homeownership Declining but Still Exceeds 28% in Two- Thirds of the Nation The portion of average local wages consumed by major own- ership costs on median-priced, single-family homes has decreased from the second to Q 3 of 2022 in 45% of the 581 counties analyzed, helping to drop the level na- tionwide. However, the amount needed remains more than 28% of average local wages in 400—or 69%—of those assuming a 20% down payment. That is up from the 66% figure in Q2 of 2022 for the same group of counties, and from 43% in Q 3 of last year. Counties that require the largest percentage of wages are: • Kings County (Brooklyn), New York (106.1% of annual- ized weekly wages needed to buy a single-family home) • Santa Cruz County, California (98.9%) • Marin County, California (out- side San Francisco) (96.1%) • Napa County, California (86.4%) • Monterey County, California (84.5%) Aside from Kings County, New York, counties with a population of at least 1 million where major ownership expenses typically con- sume more than 28% of average local wages in Q 3 of 2022 include: • Orange County, California (outside Los Angeles) (76%) • Queens County, New York (73.8%) • Nassau County, New York (outside New York City) (67.2%) • Alameda County (Oakland), California (67.2%) Counties where the smallest portion of average local wages are required to afford the median- priced home during Q 3 of this year are: • Schuylkill County, Pennsylvania (outside Allentown) (10.5% of annual- ized weekly wages needed to buy a home) • Peoria County, Illinois (13.4%) • Bibb County (Macon), Georgia (14%) • Macon County (Decatur), Illinois (14.1%) • Rock Island County (Moline), Illinois (14.1%) Counties with a population of at least 1 million where major ownership expenses typically consume less than 28% of average local wages in Q 3 of 2022 include: • Wayne County, (Detroit), Michigan (15.4%) • Philadelphia County, Pennsylvania (18.3%) • Cuyahoga County (Cleveland), Ohio (18.4%) • Allegheny County (Pittsburgh), Pennsylvania (21%) • Cook County (Chicago), Illinois (24.4%) Historic Affordability Inching Upward but Remains Worse Than Historic Averages in Nearly all Counties Among the 581 counties ana- lyzed in the report, 574—99%—are less affordable in Q 3 of 2022 than their historic affordability aver- ages. That is virtually the same as the 98% level in the second quarter of 2022, but up from 69% a year ago. Despite that, historic indexes have improved quarterly in 45% of those counties, helping to boost the nationwide index for the first time since late 2020. Data also found that among the 581 counties in the report, only seven—1%—are more affordable than their historic averages in Q 3 of 2022. That number is down from 31% a year ago, and 51% in Q 3 of 2020. "Home price appreciation has slowed dramatically in most markets— and there are even price corrections in some areas—as home sales have declined significantly over the past few months." —Rick Sharga, EVP of Market Intelligence at ATTOM