Home Affordability Breaks Historical Norms in 98% of Counties

Homeownership costs exceeded historical affordability levels in 98% of the 583 U.S. counties analyzed during the third quarter of 2026, according to an ATTOM report released October 22. Nearly one-third of those counties were classified as “seriously unaffordable,” meaning typical ownership expenses consumed more than 43% of an average local worker’s wages.

The findings matter to sellers because affordability now depends on much more than the asking price. Mortgage payments, mortgage insurance, property taxes and homeowners insurance are collectively limiting what buyers can qualify for—and what they are willing to offer.

Lower home prices were not enough to restore buying power

The national median sales price for single-family homes and condos declined to $368,000 in the third quarter. That was 1% below the second quarter’s $370,000 median and 2% below the $375,000 recorded one year earlier. Despite those declines, borrowing rates had climbed to 7.3% by the end of the quarter, according to the report.

ATTOM evaluated affordability using a median-priced home, a 20% down payment and a 28% front-end debt-to-income guideline. That ratio measures how much gross income goes toward primary housing expenses. The model found that a buyer would need an annual income of $90,191 to afford the national median-priced home, compared with an average annual wage of $79,534.

This is not a prediction of whether any particular buyer will qualify. Buyers may bring larger down payments, combine household incomes or carry different debt loads. But the gap shows why a small price reduction does not necessarily create a large increase in demand: financing and ownership costs can erase the benefit.

Sellers face a narrower pool of qualified buyers

For sellers, the immediate risk is not simply that buyers dislike current prices. It is that fewer households can make the monthly numbers work. A property may attract online views and showings while still struggling to produce offers from buyers who can satisfy a lender’s requirements and remain comfortable with the payment.

That makes nearby closed sales only one part of a pricing decision. Sellers should also examine active competition, recent price reductions, days on market and the estimated monthly ownership cost at prevailing rates. A comparable home that sold months ago may have reached the market under materially different financing conditions.

Insurance and taxes deserve particular attention. Two homes with similar prices can present different monthly costs because of tax assessments, insurance exposure, association charges or mortgage-insurance requirements. Providing accurate records for taxes, insurance history and recurring property expenses can help buyers evaluate the home without adding unnecessary uncertainty.

Preapproval quality also matters more in a strained market. Sellers and their agents should distinguish between a preliminary letter and underwriting that has verified income, assets and credit. The highest offer is not automatically the strongest if the buyer is near the edge of qualification or depends on an appraisal that the contract price may not support.

Affordability pressure varies sharply by county

The national figures conceal major local differences. In Kings County, New York, the median price reached $1.1 million and modeled housing costs equaled 114.1% of typical local wages. Santa Cruz County, California, posted a $1,105,000 median even after a 5% year-over-year price decline; modeled costs there reached 105.5% of wages.

Other expensive California counties included Marin at 102.4% of typical wages, Orange at 92.6% and Monterey at 91.8%. Among large counties, the expense-to-wage figures included 69.9% in Los Angeles County, 69.6% in San Diego County, 37% in Maricopa County, Arizona, and 30.2% in Cook County, Illinois.

The income required under ATTOM’s assumptions was also highly uneven. A buyer needed an estimated $409,992 annually to afford New York County’s $1,675,000 median-priced home at the 28% guideline. Required incomes were $381,550 in San Mateo County, $363,242 in Santa Clara County and $361,805 in San Francisco County.

Those figures do not mean every seller in a high-cost county must make a steep cut. They do mean pricing errors can be more consequential where the buyer pool is already compressed. Sellers should define their likely buyer by income range, down-payment capacity and financing type rather than assuming broad demand will absorb an ambitious list price.

Pricing and contract terms can address the monthly-payment problem

Several Texas counties remained below the 28% affordability threshold, including Harris, Dallas and Bexar. Sellers in those markets may have a broader locally qualified buyer base, but they still compete with available inventory and new construction. Builders can use financing incentives that individual homeowners may not be able to match directly.

A seller deciding between a price reduction and a concession should compare how each affects the buyer’s monthly payment and the seller’s net proceeds. Depending on the loan program and contract limits, closing-cost assistance or an interest-rate buydown may address a buyer’s constraint more efficiently than an equal reduction in price. Such terms should be reviewed with the buyer’s lender and the closing professionals before acceptance.

Condition also becomes more important when buyers have little room left after the monthly payment. Visible repair needs can trigger concerns about cash reserves, insurance eligibility and future maintenance. Sellers do not need to renovate automatically, but they should understand which defects could interfere with financing or materially narrow the eligible buyer pool.

The practical lesson is to price against current purchasing power, not a neighbor’s peak-era result. Sellers should establish a realistic list-price range, calculate net proceeds under multiple concession scenarios and decide in advance how they will respond if inspection, appraisal or financing issues arise. In this market, a saleable price is the one that both the property and the buyer’s monthly budget can support.