In 99% of the U.S., homes became less affordable this year. Here are the 7 places where they didn't.

By Aarthi Swaminathan

In 1.2% of U.S. counties, homes became more affordable over the second quarter of 2024 when compared with historical averages, Attom Data Solutions says

Buying a home is out of reach for many Americans as home prices and mortgage rates continue to climb. But there are a small number of counties where it became relatively more affordable to buy a home over the second quarter of this year, according to a new report.

Of the 589 U.S. counties analyzed by real-estate-data company Attom Data Solutions, 582, or 98.8%, had become less affordable in the second quarter of 2024 than their historic affordability averages.

"The latest affordability data presents a clear challenge for home buyers," Attom CEO Rob Barber said in a statement.

But seven counties, accounting for 1.2% of the total, defied the trend, with homes becoming more affordable over that period when compared with their historical average: Calhoun County, Ala.; Macon County, Ill.; San Francisco County, Calif.; Ontario County, N.Y., outside of Rochester; Mercer County, Pa., north of Pittsburgh; New York County, N.Y., which includes Manhattan; and Calcasieu County, La.

Homes in some of those places still come with a hefty price tag. In New York County, a buyer would need to earn $407,000 a year to comfortably afford a typical home, Attom found, while in San Francisco, they would need to make nearly $340,000.

Attom defined affordability by calculating the income needed to meet major monthly home expenses for a median-priced single-family home. It assumed a 20% down payment and that monthly housing costs wouldn't account for more than 28% of a buyer's gross monthly income.

The Attom report looked at relative affordability over time.

The findings highlight how tough it is right now for home buyers, who are facing record-high housing costs.

Housing affordability is strained as the 30-year mortgage rate posted the biggest jump in a month in early July. The 30-year rate averaged 6.95% as of July 3, according to weekly data from Freddie Mac (FMCC).

Across all U.S. counties, the national median price of a home rose to a new high of $360,000, the company said, which equates to a monthly housing cost of $2,114 - also a record high. That includes the monthly mortgage payment as well as homeowners insurance, mortgage insurance and property taxes.

With wages not keeping pace with home prices, housing costs are eating up more of household income. The monthly cost of owning a home accounted for 35.1% of the average national wage of $72,358 in the second quarter of 2024, the highest level since 2007.

There are many counties where the same income goes a lot further than in a big city - but for buyers, purchasing in those places might require them to relocate.

Home prices ate up a small portion of average local wages in places like Cambria County, Pa., where 12% of annualized weekly wages were needed to buy a home, as well as Macon County and Peoria County, Ill., Attom's analysis found.

Mortgage rates are expected to fall over the course of the year, which could provide some relief for home buyers. Despite an increase in rates in early July, "we are still expecting rates to moderately decrease in the second half of the year, and given additional inventory, price growth should temper, boding well for interested homebuyers," Sam Khater, chief economist at Freddie Mac, said in a statement.

How have higher housing prices affected you and your financial decisions? MarketWatch would like to hear from readers who want to share their experiences. You can write to us at readerstories@marketwatch.com. A reporter may be in touch.

-Aarthi Swaminathan

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07-06-24 0744ET

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