American Homeownership Dream Fades as Nearly a Third of Counties Become 'Seriously Unaffordable'

The prospect of owning a home in the United States is becoming increasingly difficult, with a new report from real estate data firm ATTOM indicating that nearly one in three U.S. counties are now considered "seriously unaffordable" for buyers.

In 180 of the 583 counties analyzed, typical housing costs represented more than 43 percent of local wages. This figure far exceeds the 28 percent affordability benchmark commonly used in the industry. Furthermore, homes were less affordable than their historical averages in 98 percent of the counties studied, signaling widespread financial strain for potential homeowners.

New York City's Kings County, which encompasses Brooklyn, emerged as the least affordable county relative to local earnings. Monthly expenses for a median-priced home there consume 114.1 percent of typical wages. Santa Cruz County, California, followed closely, with homeownership costs accounting for 105.5 percent of local earnings, and Marin County, California, at 102.4 percent. Other notably unaffordable areas include Orange County, California (92.6 percent), and Monterey County, California (91.8 percent).

To afford a median-priced property in New York County, also known as Manhattan, buyers would need an annual income of $409,992. San Mateo County, California, requires an income of $381,550, followed by Santa Clara County at $363,242, San Francisco County at $361,805, and Marin County at $348,321.

These findings persist even as national home prices have seen a slight decrease. The median home price dipped to $368,000 in the third quarter, down from $370,000 in the previous quarter and $375,000 a year prior. However, high mortgage rates continue to drive up the cost of buying a home. The average 30-year fixed mortgage rate reached 7.3 percent by the end of the quarter, with the 15-year rate at 6.6 percent.

Across all analyzed counties, monthly homeownership expenses averaged 31.8 percent of a typical worker's wages, surpassing the 28 percent affordability threshold. In 80.1 percent of counties, these expenses exceeded this benchmark.

Nationally, a buyer would need to earn $90,191 annually to afford a median-priced home, according to ATTOM's calculations. This contrasts with the typical national wage of $79,534, leaving an annual gap of $10,657, or approximately $888 per month. This means a household earning the average wage requires about 13 percent more income to meet affordability standards, before considering other financial obligations like car payments, student loans, or childcare.

The affordability gap has widened over time. In the first quarter of 2026, buyers needed $84,230 annually for the national median home. This figure increased to $90,191 by the third quarter, driven by a rise in median home prices and mortgage rates.

For first-time buyers, the challenge of accumulating a down payment is a significant hurdle. A 20 percent down payment on a $368,000 home would require $73,600, excluding closing costs. Saving this amount over five years necessitates setting aside about $1,227 monthly.

While a 20 percent down payment is the standard used in ATTOM's affordability calculations, the National Association of Realtors reported that the median first-time buyer put down only 10 percent. First-time buyers represented a record low of 21 percent of all purchases, with their typical age reaching an all-time high of 40.

Opting for a lower down payment can enable quicker homeownership but typically results in higher monthly payments. For instance, at a 7.3 percent mortgage rate, a $368,000 home with 20 percent down would have principal and interest payments of approximately $2,018 monthly. With a 10 percent down payment, this figure rises to about $2,271, before private mortgage insurance.

While traditional lending benchmarks suggest households should not spend more than 28 percent of gross income on housing, FHA guidelines permit up to 31 percent for housing costs and 43 percent for total debt. Some automated underwriting systems can approve up to 50 percent of total debt under specific circumstances. However, qualifying for a mortgage does not always equate to comfortable homeownership.

In large counties, the affordability squeeze is evident. Nassau County, New York, saw homeownership expenses consume 79.6 percent of typical wages, followed by Queens County at 76.7 percent, Los Angeles County at 69.9 percent, and San Diego County at 69.6 percent.

Conversely, housing costs represent a smaller portion of wages in some other large counties, such as Harris County, Texas (20.7 percent), Dallas County (24.3 percent), and Bexar County (27.2 percent).

While wages are growing faster than home prices in 58.9 percent of counties, this is a decrease from 64 percent in the first quarter. Experts note that higher mortgage rates have largely negated the benefits of falling prices. For example, an increase in the 30-year average mortgage rate from 6.27 percent to 7.40 percent adds approximately $222 per month to a loan payment, while a $7,000 fall in the median home price saves a buyer only about $38 per month on principal and interest with a 20 percent down payment.

Buyers are beginning to gain some leverage as the market slows. As of late October, 43 percent of single-family home listings nationally had undergone a price reduction. The median list price stood at $434,900, with homes taking a median of 70 days to sell. This environment offers buyers more choices and negotiation room, though the primary obstacle remains the monthly payment rather than the sticker price.

Experts advise first-time buyers to secure preapproval and prioritize the monthly payment over the maximum loan amount. They also suggest comparing the benefits of seller-funded mortgage-rate buydowns against equivalent purchase price reductions, noting that buydowns often offer a more significant financial advantage in the current market.