Major expenses on median-priced homes currently consume 32% of the average national wage, according to the First Quarter US Home Affordability Report published by ATTOM. That share is nearly unchanged from the fourth quarter of 2024 and up by about one percentage point up from one year earlier.
The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage payments, property taxes and insurance — on a median-priced single-family home, assuming a 20% down payment and a 28% maximum “front-end” debt-to-income ratio. Compared to historical levels, median homeownership costs in 554 of the 574 counties analyzed in the first quarter of 2025 are less affordable than in the past. That is down slightly from both the fourth and first quarters of 2024.
Nationwide, the typical $2,021 cost of mortgage payments, homeowner insurance, mortgage insurance and property taxes is down 0.7% quarterly while the average national wage has inched up by 1.1%. Annually, typical costs are up 5.6% compared to a 4.2% increase in the average national wage.
“Home affordability is in a holding pattern this quarter – financially stressful for average wage earners but not changing much,” said ATTOM CEO Rob Barber. “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. 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. With so much economic uncertainty these days connected to investment markets, federal policy shifts and very mixed economic forecasts, it is anyone’s guess how much prices will move.”
