Median salary needed to buy a home is now $76K

From WWW.DAILYMAIL.CO.UK

A family making the median national income can no longer afford the typical house in 35 of the country's 50 biggest cities, according to a new study.

Based on home price data from the first quarter of the year, the salary needed to afford the median US home stood at almost $76,000 - roughly $8,500 more than the typical household actually makes, according to an analysis from Visual Capitalism.

The study found that San Jose leads the nation in unaffordable homes, with the median home priced at $1,875,000, requiring a salary of at least $330,758 to afford the expected monthly payments of $7,718.

The top four markets for median home prices were all in California, with San Francisco, San Diego and Los Angeles following San Jose.

New York City ranked seventh on the list with a median home price of $578,100 requiring an annual salary of $129,458. The Big Apple ranked slightly below Boston, where an income of $130,203 is needed to afford the typical home price of $639,000.

Meanwhile, the median household income across the country stood at just $67,500, which would be enough to afford the typical home in only 15 of the cities on the list.

Most of the more affordable cities were located in the Midwest. Pittsburgh ranked the most affordable, with a median home price of just $185,700, requiring a salary of just $42,858 to afford monthly payments.

In addition to Pittsburgh, a family making $50,000 a year or less could afford the median home payment in St. Louis, Louisville, Cleveland, and Oklahoma City, the study found.

Typical income does vary across the country, and the cities with the most expensive homes usually have some of the highest average salaries.

Still, median home payments outpaced median local salaries in many of the cities on the list -- a symptom of the broader unaffordability issue that has seen prices outpace wages for some time.

Consumer prices have soared 9.1 percent over the past year, the biggest yearly increase since 1981. Housing costs, which make up a third of the consumer price index, were up 5.6 percent in June from a year ago -- though that data is only collected twice a year, and likely lags behind real costs.

The new home affordability study assumes a down payment of 20 percent, and assumes that no more than 28 percent of a family's income would go toward monthly home payments.

The report was based on data from Home Sweet Home for the first quarter of 2021, which set the median US home price at $368,200 and the average fixed mortgage rate at 4 percent.

Home prices and mortgage rates have actually increased since then, meaning that the study might even be underestimating the salary needed to afford a home in many markets.

The national median home price jumped 13.4 percent in June from a year earlier to $416,000. That's an all-time high in data going back to 1999, according to the National Association of Realtors.... (Read more)

Submitted 5 days ago


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