Nov 01, 2023

AMERICANS MUST EARN $114,000 A YEAR TO AFFORD A TYPICAL HOME

The affordability of housing in the United States has reached a new threshold, with a yearly income of $114,000 now required to afford a median-priced home. This benchmark is predicated on securing a mortgage at a 7.2% interest rate and making a 20% down payment on a home valued at approximately $412,001, as per the latest data from Redfin. The standard for affordability has traditionally been set at a level where housing expenses do not exceed 30% of a household's income. Comparing this to historical figures, there's a stark increase in the income needed for home ownership. In 2012, an annual income of about $38,000 was sufficient to purchase a typical home. The rise to the current requirement of $114,000 underscores a significant escalation in the financial challenges faced by potential homebuyers. This trend points to broader economic issues such as wage stagnation, the cost of living, and interest rate fluctuations. As the gap between home prices and income widens, the question of how to address housing affordability becomes increasingly pressing for policymakers and the public alike.

Real Estate

Nov 01, 2023

AMERICANS MUST EARN $114,000 A YEAR TO AFFORD A TYPICAL HOME

To purchase a typical home in the US, Americans now need to earn a yearly salary of $114,000, marking a significant increase in housing affordability challenges. This figure is based on a 7.2% mortgage rate, 20% down payment on a median-priced home valued at $412,001