Owning a home is part of the American dream, but it seems to be out of reach for more and more people. In the U.S., the median-priced home is now $332,494, according to new research from Clever Real Estate, a St. Louis-based real estate company. To afford it with a 10% down payment, prospective buyers need an annual income of at least $119,769.
The thing is, that’s about $45-thousand more than the $74,755 that typical U.S. household makes in a year. Even if they put 20% down, home buyers would need an annual income of at least $98,202, which is still a lot more than the typical salary.
Clever Real Estate analyzed median home prices and median incomes for 50 of the largest metro areas to find out how much someone needs to make to afford a house in 2024 and found:
- Only six of the 50 metro areas have median-priced homes that are considered affordable for median-income households: Pittsburgh, Cleveland, St. Louis, Memphis, Indianapolis, and Birmingham.
- Pittsburgh is the most affordable metro area for home buyers, where a household income of $59,919 can comfortably afford the city’s median-priced home of $199,573.
- On the flip side, Los Angeles is the least affordable city for home buyers, they’ll need an income of $249,471 to afford a median-priced home there.
- A household making the median income of $74,755 and putting 10% down could only afford a home that costs $207,529 - that’s 38% less than the current median-priced home.
- If a median-income family wanted to buy a median-priced home, they’d need a 45% down payment or mortgage rates would need to drop from the 7.2% current rate to 4% to make it work.
- There are four states where the median-priced home is affordable for the median earner - West Virginia, Ohio, Iowa and Indiana.
- West Virginia is most affordable, it takes an income of about $47,405 to afford the median-priced home there.
Source: Clever Real Estate