Homebuyers across the U.S. need 34% more income in order to afford a home in today's market, according to a new report.
Due to increasing mortgage rates and rising home sale prices, homebuyers nationwide need to earn $76,414 annually to afford the typical monthly mortgage payment, according to real estate brokerage Redfin. That means homebuyers need to earn $19,478, or approximately 34.2%, more in income compared with a year ago, according to Redfin data.
In 50 of the most populous U.S. metros tracked by Redfin, the necessary income to afford a home increased by more than 15% year over year. However, over the same time period, average hourly wages in the U.S. only grew 5.6%, underscoring how housing costs are outpacing increases in wages, Redfin deputy chief economist Taylor Marr said in a statement.
That roughly $76,000 figure, for example, is a far cry from what over 100 million full-time wage and salary workers are pulling in.
According to recent Labor Department statistics, the median weekly earnings of full-time workers was about $1,037 per week in the first quarter of the year, which amounts to about $53,924 annually.
In March, the national median home-sale price was up 17% from a year earlier, hitting a record high of $412,700. At the same time, mortgage rates shot up from about 3% to more than 5% over the last year.
This combination, according to Redfin, drove the typical monthly mortgage payment to $1,910 last month, an uptick from $1,423 last March.
Homebuyers nationwide have been feeling the impact of these surging prices but some areas of the country, specifically in the Sun Belt, are feeling it even worse.
For instance, homebuyers in Tampa, Florida, will need to earn nearly 48% more to afford the metro area’s typical monthly mortgage payment.
In Phoenix and Las Vegas, homebuyers will need to earn over 45% more compared to a year earlier.
Other metros where homebuyers need at least 40% more income:
- Orlando, Florida
- Jacksonville, Florida
- Nashville, Tennessee
- Austin, Texas
- Fort Worth, Texas
- Anaheim, California
- Dallas, Texas
- Atlanta, Georgia
- Charlotte, North Carolina
- San Diego, California
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