US Faces Lowest Home Affordability Since 2007

House affordability in the U.S. has reached its lowest point in 17 years, leaving many average owners finding it difficult to purchase a home.

A new report from Attom revealed that the cost of owning a home, including mortgage payments along with taxes and property insurance, made up approximately 35.1% of the average American's income during the second quarter. This figure represented a 32.1% increase from the previous year and is regarded as the highest in terms of housing cost since 2007.

Income gains were outpaced by an increase in expenses, along with mortgage rates, that are in the vicinity of 7%. The pressing shortage of listings have also resulted in pushing home prices up, with the median at around $360,000, revealed Attom.

Ownership costs have eaten up to 43% of the average local wage in about a third of U.S. markets. This figure is higher than the 28% that has been considered the threshold when it comes to home affordability.

Rob Barber, the chief executive officer of Attom, said that the latest data poses a "clear challenge for homebuyers."

"It's common for these trends to intensify during the spring buying season when buyer demand increases. However, the trends this year are particularly challenging for house hunters," Barber said in a Bloomberg report.

House markets that are considered in the expensive zone, particularly in the West and Northeast regions, have shown the biggest decline in terms of affordability. This includes Brooklyn and Nassau County in New York, and Orange and Alameda counties in California.

Attom noted that it analyzed 589 counties, and around 583 (98.8%) were considered less affordable in the second quarter as compared to their affordability averages in previous years.