Americans need even higher salaries to be able to afford a home in nearly half the country.
In 22 states and the District of Columbia, potential homebuyers need to earn a six-figure salary A recent Bankrate analysis found that the amount needed to purchase a median-priced home (currently $402,343) is: Four years ago, only six states and Washington, D.C., had six-figure salary requirements for median-priced housing.
Home buyers in the United States need an average annual income of $110,871 to afford the typical home. This is an almost 50% increase in minimum income requirements compared to her 2020. According to Bankrate calculations, she can afford a typical home for $76,191.
“Home prices are near all-time highs, and if you want a home, you have little choice but to pay a higher price,” said Jeff Ostrowsky, a housing market analyst at Bankrate.
And in some states, especially in the West and Northeast, that number is closer to $200,000. In Hawaii, California, Washington, D.C., Massachusetts and Washington, potential homebuyers need an income between $156,814 and $197,057, according to Bankrate. Conversely, someone looking for a home in Mississippi, Ohio, Arkansas, Indiana, or Kentucky needs an income between $63,043 and $65,186.
A variety of factors are driving up the cost of buying a home, including high mortgage rates, inflation, and a combination of these two factors that reduces housing inventory. Average interest rate for a 30-year fixed mortgage slightly smaller According to Bankrate's weekly national survey of major financial institutions, it rose to 7.01%. That's nearly double what it was just five years ago.
Mortgage rates are rising both due to stubborn inflation. 3.2%, higher than expected In February, thanks largely to shelter and gasoline prices and the Federal Reserve's attempt to bring it down to its 2% target.Central Bank started raising interest rates The policy was introduced two years ago to reduce post-pandemic inflation, and interest rates are currently at a 23-year high of between 5.25% and 5.5%.
And it could be months before Fed Chairman Jerome Powell decides to cut rates on Friday. I'm not going to make any hasty decisions..
Meanwhile, the housing market may be correcting itself, with some encouraging trends emerging in recent months regarding housing inventory. Total number of homes for sale, including homes under contract but not yet sold. Increased by 8.8% in February According to Realtor.com, the annual total number of listings decreased for the seventh consecutive month, but increased for the third consecutive month.
More news about the housing market
Renting a starter home is now cheaper than buying in every major U.S. metro area
Millennial and Gen Z “nepo homebuyers” are about to flood the housing market
