Posted on 03/15/2024 5:31:45 AM PDT by CFW
(The Center Square) – The housing market is not immune from inflationary woes as buyer’s purchasing power has significantly diminished in four years. Home buyers in 2024 need 80% more income to purchase a home than they did in 2020, according to a new report by Zillow.
“The income needed to comfortably afford a home is up 80% since 2020, while median income has risen 23% in that time,” the report states. That equates to $47,000 more than four years ago.
“Home shoppers today need to make more than $106,000 to comfortably afford a home,” according to the report. “That is 80% more than in January 2020.”
A monthly mortgage payment for a typical U.S. home has nearly doubled since January 2020, the report notes, up 96.4% to $2,188. The calculations are based on a 10% down payment.
Home values also increased over 42% in the last four years, with the typical home nationwide worth roughly $343,000, according to Zillow’s January market report. Mortgage rates in January 2020 were 3%, the report notes. By February 2024, they are closer to 7%.
While costs have increased, wages have not. In 2020, a household income of $59,000 a year “could comfortably afford the monthly mortgage on a typical U.S. home, spending no more than 30% of its income with a 10% down payment,” the report notes. “That was below the U.S. median income of about $66,000, meaning more than half of American households had the financial means to afford homeownership.”
(Excerpt) Read more at thecentersquare.com ...
not sustainable.
bttt
“The income needed to comfortably afford a home is up 80% since 2020,…”
Gee, I wonder what happened in 2020 that could have caused this.
Build Back Better!!!
And you thought he was a failure.
nothing happens in a vacuum. There is no scenario where wages go up without inflation causing everything we buy to go up. In fact the fed whole job is to ensure that never happens, because that would be deflation.
Food up 30%, gasoline up 100%. Why do the DemonRats want to destroy America?
they broke the world over a bad flu year or two basically.
Build more homes.
The biggest challenge is in "starter homes," for sure, but I'm not sure what portion of home sales are being made to new homeowners.
The vast majority of people I've known who have bought homes in the last 25 years were relocating or upgrading from an existing home. This means the price escalation of the homes they were buying was offset by the increased equity they had built up in the homes they were selling.
If you bought a home for $250,000 and sold it for $350,000 to buy a $450,000 home, you aren't making a bare minimum down payment on the $450,000 home. A 20% down payment on that home ($90,000) is daunting to a first-time buyer, but the buyer in the scenario I've presented here would be bringing $100,000 to the table from the sale of the $350,000 home even if they never paid any principal down on the original mortgage on the $250,000 home they bought years ago.
It would take a decade for our economy to recover.
Another reason to never trust a democrat all alike.
The demonrats want more people dependent on govt handouts so that those bennies can be threatened every election season.
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