A new data report from Redfin (NASDAQ: RDFN) has determined housing affordability did not worsen in 2024, which marked the first time in four years that homebuyers enjoyed a slight break from accelerating prices.
Redfin stated a household making the $83,782 median income in 2024 would need to spend 41.8% of their earnings on monthly housing costs if they bought the $429,734 median-priced home. This is down slightly from the 42.2% recorded in 2023 – although it is also less affordable than the typical share of 30% or lower recorded throughout the 2010s.
During 2024, a homebuyer needed to earn an annual income of at least $116,782 if they wanted to spend no more than 30% of their earnings on monthly housing payments for the median-priced home. Redfin noted that was a record high and was $33,000 more than the typical household makes in a year.
The median monthly housing payment for homebuyers hit a record of $2,920 in 2024, rising 4.3% from 2023 and 86% from 2019. In contrast, wages have grown around 4% year over year throughout 2024. Redfin added this slight improvement in affordability this year could be attributed to a slightly lower average mortgage rate. Still, 2024 was the fourth consecutive year in which the income needed to keep home payments affordable was higher than the median household income.
“Affordability improved ever so slightly this year because wage growth outpaced the growth in monthly housing payments,” said Redfin Senior Economist Elijah de la Campa. “But that’s not to say buying a home became affordable. For many Americans, buying a home remains more out of reach than ever and that’s unlikely to change anytime soon. Even with inventory trending upwards, we still expect prices to continue rising in 2025 due to a lack of homes for sale—pushing more would-be homebuyers to rent instead.”
;
