Median home prices are rising faster than wages—at a rate not seen since the third quarter of 2008, a time still etched in the minds of many as the brink of financial ruin. The good news is people in some markets are paying a smaller share of their income to own. Amid this trend, knowing where to buy is more vital than ever.

The 2017 U.S. median home sale price of $253,000 is a 7.7 percent jump over last year. And in the second quarter of this year, housing prices reached their least affordable level since Q3 2008, according to data released Thursday by ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database. To reason is a combination of rising home prices and slowing wage growth, accompanied by mortgage rates that have risen 50 basis points in the past year. These factors have “eroded home affordability nationwide to the lowest level in nearly nine years,” says Daren Blomquist, senior vice president of ATTOM.

ATTOM compared median sale prices for the second quarter of 2017 with average weekly wages to determine affordability in 403 out of 464 counties. “Home prices rise faster than weekly wages in 87 percent of markets nationwide,” said ATTOM’s press release.

The five least affordable counties are in:

  • Marin County in California, where the metropolitan statistical area (MSA) includes San Francisco-Oakland-Hayward and where buying a median-priced home will eat 126.4 percent of annualized wages;
  • Kings County, which covers Brooklyn, New York;
  • Santa Cruz in California, which includes Santa Cruz-Watsonville;
  • Summit County in Utah; and
  • Monroe County in Florida, home to the resort of Key West, where buying that home will tap 100.3 percent of annualized wages.

The most affordable counties are:

  • Roane, Henry and Hardin counties in Tennessee. Purchasing a median-priced home in the Roane MSA (which includes Knoxville) will only tap about 10 percent of the owner's annualized wages;
  • Clayton County in Georgia, whose MSA includes Atlanta-Sandy Springs-Roswell;
  • Wayne County in Michigan, where the MSA includes Detroit-Warren-Dearborn


The Seattle area, part of King County, Washington, stunned researchers because home price appreciation there outpaced wage growth in all three area counties. "Median home prices ... increased 15 percent from a year ago while average weekly wages increased 3 percent annually," said Matthew Gardner, chief economist at Windermere Real Estate, in the report.


And some markets indicate home values are rising in formerly downtrodden locations. Michigan in the Flint metro area, hit hard by the auto industry's decline in '08, made it to No. 75 in the least affordable category after making economic strides. “The affordability index compares a market to its own historic affordability norms,” explains a spokeswoman for ATTOM. So compared with Flint's historic norms, parts are now unaffordable “thanks to a recent surge in home prices—up 182 percent since bottoming out in Q1 2009.”  


Similarly, the housing market in Ohio is seeing more robust prices. Cincinnati, Dayton and Cleveland still take only a small slice of the average area wages (18.4 percent) for the median home. This increase is not due to a sudden infusion of newcomers or a giant corporate interest; the recovery in Columbus, for example, has been homegrown and steady, says Jamie P. Menges, a principal and client adviser at PDS Planning in Columbus. 

The state's “economy has been advancing away from a manufacturing base to a more professional services and tech-oriented economy for 20 years, especially within the cities named in this report.” Ohio start-ups are staying in place thanks in great part, Menges says, to Ohio Venture, a non-profit that steers venture cap dollars to fledgling companies. Proof that it's working is the acquisition, in January, of start-up Cover My Meds, a prior authorization health-care software company, by San Francisco-based McKesson Corp., a retail level pharmaceuticals distributor, for $1.1 million. “This is great for the whole Midwest!” says Menges.