Americans’ incomes have risen for the first time in four years, according to the U.S. Census Bureau. That’s good news for workers but not necessarily for homebuyers.
Median household income rose to $80,610 in 2023, essentially the same as it was at its pre-pandemic peak in 2019. This represents a 4% increase from 2022. However, home values have risen so sharply since before the pandemic that the salary bump barely affects where Americans can afford to buy a house.
“Given today’s mortgage rate and the 30% affordability rule of thumb, a household earning the 2023 median household income could afford a home priced up to roughly $285,000, assuming a 10% down payment,” says Realtor.com® senior economic research analyst Hannah Jones.
However, the Realtor.com August housing report shows that home prices now hover nationwide at a median of $429,995—nearly double what a buyer can reasonably afford.
“The U.S. median listing price was roughly $145,000 higher than this level in August, suggesting that the median U.S. household income would not be enough to purchase a home in much of the country,” Jones points out.
While most of the country remains unaffordable for the average household, Jones notes that “the median listing price was less than or equal to this [income] level in 10 of the 100 largest U.S. metros in August.”
In other words, affordable homeownership is possible in certain areas:
– Detroit, MI: Median list price: $99,000
– Toledo, OH: Median list price: $130,000
– Cleveland-Elyria, OH: Median list price: $143,000
– Akron, OH: Median list price: $145,000
– Dayton-Kettering, OH: Median list price: $180,000
– Rochester, NY: Median list price: $185,000
– Scranton-Wilkes-Barre, PA: Median list price: $189,000
– Buffalo-Cheektowaga NY: Median list price: $220,000
– Pittsburgh PA :Median list Price:$265K
-McAllen TX :Median Listing Price:$299K
If none of these metros suits you there’s always renting but that isn’t exactly bargain either.According To The 2023 American Community Survey Released By The Census Bureau ,The Cost Of Rent And Utilities Increases faster than Home Values For First Time In A Decade .
Increased rent by comparison were faster then inflation adjusted increases(1point8%)to Housing costs .More over increased Demand Rents also drove up due would-be Buyers switching Markets forcing many Americans find squeezed out whether Renting Or Buying.
