Q3 Housing Affordability Struggles Across U.S. Metros

The housing market in the U.S. continues to grapple with affordability issues, according to the latest findings from ATTOM’s Q3 2025 U.S. Home Affordability Report. The report indicates that an overwhelming 99% of counties with sufficient data are experiencing median-priced homes and condominiums that are less affordable than historical norms. With home prices hitting new record highs, affordability continues to worsen across many U.S. counties, exacerbating the challenges for prospective homeowners.

The third quarter of 2025 saw median home prices reach a new high of $375,000, representing a 2.0% increase from the previous quarter and a 4.8% rise from the same period in 2024. Yet, despite this record surge, affordability issues persist 44.7% of the 580 counties in ATTOM’s analysis reported even lower affordability than the prior quarter, further amplifying concerns.

A Rising Cost Burden

Rob Barber, CEO of ATTOM, remarked on the current situation: “The drop in mortgage rates will help some buyers keep pace with the rising cost of homes, but the more favorable loan rates could also enable prices to keep rising, extending this two-and-a-half-year streak of homes being less affordable than historically normal levels.”

Mortgage rates have indeed seen a decrease throughout Q3, with the 30-year fixed rate falling from 6.75% in mid-July to 6.26% in mid-September. While this shift brings some relief, it still hasn’t been enough to counterbalance the sharp rise in home prices.

One of the most significant contrasts is between the rise in median home prices and wage growth. Average wages have risen by about 28% since 2020, but home prices have surged by 58% during the same period. This disparity highlights the increasing difficulty for many prospective buyers to keep up with rising costs.

ATTOM measures affordability by estimating the monthly income required to cover the major costs of homeownership, including mortgage payments, property taxes, insurance, and mortgage insurance. For a median-priced home, a 20% down payment and 28% maximum debt-to-income ratio are assumed, reflecting what an average wage earner could afford.

Regional Trends and Price Variations

The housing affordability crisis is not universal but is particularly pronounced in certain regions. 79% of the counties analyzed saw homeownership costs exceed 28% of the average resident’s income this metric is commonly considered unaffordable by traditional standards. High-population counties like Brooklyn, Los Angeles, and Chicago are particularly hard hit.

Conversely, more affordable regions, like parts of Pennsylvania, Ohio, and Michigan, continue to offer more opportunities for buyers. Some of the top-performing counties for affordability include:

• Harris County, Texas, where the median home price requires just 23.3% of typical annual wages.
• Cuyahoga County, Ohio, at 23.1% of wages.
• Allegheny County, PA, at 22.4%.
• Philadelphia County, PA, at 20.1%.

However, even these markets are still feeling the pressures of rising prices, as homes in Cuyahoga County, for example, saw a 13% increase in median home prices YoY in Q3 of 2025.

The Impact of Wages and Home Prices

According to ATTOM, housing affordability worsened in nearly half of the counties analyzed. 49.8% of counties experienced home prices growing faster than local wage increases, compared to 34.9% the previous quarter. Major metro areas such as Cook County, IL, and Kings County, NY were among the hardest-hit.

The largest counties where home prices outpaced wage growth include:

• Cook County, IL
• Kings County, NY
• Bexar County, Texas
• Wayne County, MI
• Middlesex County, MA

On the flip side, counties like Los Angeles County, Harris County, and San Diego County showed wage growth outpacing home price increases, though even these areas are experiencing strains.

California & New York: The Epicenters of Unaffordability

California and New York counties have once again emerged as the least affordable for homebuyers. The counties with the highest proportion of income required to afford a home include:

• Kings County, NY (113% of typical wages)
• Santa Cruz County, CA (111.8%)
• Marin County, CA (101.3%)
• Monterey County, CA (96.8%)
• Maui County, HI (94%)

In some of the larger metro counties, such as Orange County, CA, Queens County, NY, and Nassau County, NY, owning a home requires a staggering 93% of the typical resident’s wages. The high cost of living in these areas, compounded by real estate prices and elevated demand, continues to place tremendous pressure on local buyers.

Looking Ahead: What’s Next for Affordability?

To afford a $375,000 median-priced home in Q3 2025, a household would need to earn at least $90,989 annually to keep housing expenses under 28% of their income. But for many, that’s still a tough hill to climb.

While some areas in Pennsylvania and the Midwest remain relatively affordable, areas like California, New York, and other high-demand regions are seeing a growing disparity between wages and housing costs. As the cost of living continues to rise and mortgage rates fluctuate, affordability will remain a key concern for many aspiring homeowners across the country.

Despite the slight decline in mortgage rates, affordability struggles will persist, especially in high-cost metros. The growing imbalance between income and housing prices will continue to be a defining characteristic of the U.S. housing market for the foreseeable future. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.