Wyndmoor, Pennsylvania – Recent studies suggest that the dream of owning a home in the United States is becoming increasingly unattainable for many, with the average income needed to afford a typical home now exceeding $100,000 per year.
The housing market has seen a dramatic shift in the past four years, marked by soaring home prices, high mortgage rates, and limited inventory. This surge has outpaced the growth in wages, making it challenging for prospective homebuyers to keep up with the increasing costs.
A study conducted by Zillow revealed that the annual income required to purchase a typical home in the U.S. has skyrocketed to over $106,000, representing an 80% jump from the $59,000 estimated in 2020. Similarly, a separate study by Bankrate indicated that Americans would need to earn $110,871 per year to afford a median-priced home, which now costs $402,343.
The disparity between income and housing costs is especially pronounced in states like California, New York, and Massachusetts, where prospective homeowners would need to earn well over six figures to purchase a home. In contrast, cities like Memphis, Cleveland, New Orleans, and Birmingham offer more affordable housing options for buyers.
Despite the regional variations in home prices, the overall trend points to a challenging housing market for many Americans. In cities like Pittsburgh, St. Louis, and Detroit, only households making the median income can realistically afford a typical home, according to Zillow’s findings.
The data indicates a widening gap between housing affordability and income levels, raising concerns about the future of homeownership in the United States. As housing prices continue to climb and wage growth remains stagnant for many, the path to homeownership is becoming increasingly out of reach for a significant portion of the population.