Since 2020, it has been far more difficult for many people in the United States to purchase an inexpensive home.
According to a recent survey by Bankrate.com, purchasers in 22 states as well as Washington, DC, must make six figures in their family income to comfortably afford a typical median-priced home.
This is a significant increase compared to January 2020, when Bankrate discovered that purchasers in just six states and the District of Columbia required a six-figure income. Based on that, Bankrate calculated that in the United States – where the overall median home price is $402,343, according to Redfin – “aspiring homebuyers must earn $110,841 annually to afford a median-priced home.
According to Jeff Ostrowski, an analyst with Bankrate, “Home price appreciation has so far outpaced wage growth, making homes less affordable.” Why have home costs increased so quickly? The blame is on demand and supply.
He claimed that in addition to the “lock-in effect” of rising mortgage rates and property prices, there has been less homebuilding, resulting in a housing supply shortage to match buyer demand. Because buying a new home will cost more, current homeowners are reluctant to sell.
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