A homebuyer needs to earn $114,627 in order to afford the purchase of a median-priced home, according to data from Redfin (NASDAQ:RDFN). This up 15% ($15,285) from one year ago and up by more than 50% since the start of the pandemic in March 2020.
The current income level for homebuying is the highest on record. The typical American household earned about $75,000.
On a regional level, Bay Area buyers seeking homes in San Francisco and San Jose must earn $400,000, both up nearly 25% year-over-year. At the other end of the spectrum, Detroit homebuyers must earn about $52,000 to afford the area’s median-priced home, up 19% from a year ago.
Furthermore, the typical homebuyer’s monthly mortgage payment is $2,866, up 20% from $2,395 one year ago and a new all-time high.
“Buyers—particularly first-timers who are committed to getting into a home now—should think outside the box,” said Redfin Economics Research Lead Chen Zhao. “Consider a condo or townhouse, which are less expensive than a single-family home, and/or consider moving to a more affordable part of the country, or a more affordable suburb.”
;
The major issue with this article is that the amount of house that you can qualify for is more dependent on the loan amount than the amount of income earned. Buyers who move up in price range may have the option of using the equity in their home and/or other real estate for a down payment that will result in a loan amount and monthly mortgage payment that they can qualify for and are willing to pay.
The article did not mentioned the impact of consumer debt.