via housingwire:
In this brutal housing market, you’ll need to make $115K to buy the typical US home
It is almost 3 times more than what the standard American household makes.
The last two years of soaring mortgage rates and rising home prices have brought the fastest erosion in housing market affordability in modern history, and it’s hurt first-time homebuyers the most.
A homebuyer must earn $114,627 to afford the median-priced U.S. home, up 15% ($15,285) from a year ago and up more than 50% since the start of the pandemic in early 2022 (previous pre pandemic required household income was between $50,000 to 55,000 for a median priced house).
That’s the highest annual income necessary to afford a home on record. Meanwhile, wages have only increased by 5% since 2022.
To conduct this analysis, Redfin compared median monthly mortgage payments for homebuyers in August 2023 and August 2022.
On Thursday, 30-year fixed-rate mortgage rates crossed the 8% threshold, according to Mortgage News Daily. In March 2022, the 30-year fixed-rate mortgage averaged 3.56%.
Meanwhile, the median price for a U.S. home was $420,000 in August, up 3% compared to August 2022. At the start of the pandemic, the median sales price was $260,062. (61 % rise).
In the latest September existing home sales report, the median price remained 2.8% higher than in September 2022. On a month-to-month basis, the payment for the average U.S. buyer hovers around $2,866, an all-time high according to Redfin.
Of course, high mortgage rates and home prices don’t harm all-cash buyers and move-up buyers as greatly.
In terms of metro-level disparities, the quintessential “zoomtown” of Miami is where income needed to buy the median home rose the most. Interesting, Austin, another zoomtown, was the metri that saw the smallest uptick.