U.S. Homebuyers Need $115K Annual Income to Afford Median Home

Author

Slice of Real Estate Team
September 27, 2024

Key Highlights:

  • Homebuyers need $115,454 to afford a median-priced home ($433,101).

  • This is the first annual decline in required income since June 2020.

  • Mortgage rates have fallen to 6.09% from 7.07% a year ago.

  • Less than one-third of homes are affordable for the typical household.

  • Texas metros saw the largest affordability improvements.

Notable Quote:

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“Housing affordability is improving for the first time in four years, so if you want to buy a home and can afford to, now could be a good time because it’s unlikely to become markedly cheaper in the near future. Many house hunters are waiting to see if mortgage rates fall a lot further, but that probably won’t happen anytime soon."

Elijah de la Campa, Senior Economist at Redfin

Our Take:

The decline in mortgage rates and required income is a positive signal for potential buyers, but the affordability gap remains wide. Texas metros like Austin and San Antonio are leading the charge in affordability improvements due to increased homebuilding, while East Coast metros face steeper price hikes. Buyers should act strategically as rates stabilize and home prices remain elevated, particularly in high-demand markets.