[ad_1]
American households earning the median wage are seeing the pool of homes they can afford shrink, according to a new report by the National Association of Realtors and Realtor.com, published on Wednesday.
A family earning an annual income of $75,000 per year or less — about 51% of households — can afford to buy a home up to $256,000. They could afford just 23% or 262, 580 of the existing 1.1 million home listings in April 2023.
That share has shrunk considerably over the last five years: In April 2018, a household earning $75,000 a year — which could afford a $281,480 home — had 810,000 listings in their price range, which was just under 50%.
“There are even fewer homes available for sale that middle-income buyers can afford to buy now than in 2018,” the report stated.
“It’s more expensive to build a home, due to inflation and supply chain disruptions we had in the past,” Nadia Evangelou, senior economist at the NAR, told MarketWatch in an interview.
For home buyers who are struggling to afford to purchase a home in their city, “you can broaden your search area to more affordable areas,” she added.
“‘It’s more expensive to build a home, due to inflation and supply chain disruptions we had in the past.’”
The most expensive real-estate markets in the U.S. were “surprisingly” affordable to its residents, the NAR said.
While typical homes in West Coast markets like San Francisco, San Jose, and San Diego are frequently priced above $850,000, the NAR didn’t consider there to be a big shortage of affordable homes since the median income in most of these areas was above $150,000, the report said.
For a typical worker in San Jose who was earning $150,000 a year, they had 1,340 listings they could choose from that were under $850,000.
The largest shortage of affordable homes priced $260,000 was in El Paso, Texas, followed by Boise City, Idaho, and Spokane, Wash., according to the report.
In Boise City, buyers earning $75,000 a year could only afford to buy just 2% of the listings, the NAR said.
Particularly in Boise, home prices shot up over the last few years, Evangelou said, by almost 70% according to the NAR data.
On the flip side, the parts of the Midwest had an oversupply of affordable homes. Three Ohio cities took the top spot: Youngstown, Toledo, Akron.
Buyers earning $75,000 in Youngstown, for instance, can afford 72% of the homes listed for sale, the NAR said.
Cleveland, Ohio, Syracuse, N.Y., and Pittsburgh, Pa. followed.
(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.)
Are you a homebuyer, seller, realtor or mortgage broker? Reach out to share your story with MarketWatch’s housing reporter Aarthi Swaminathan at aarthi@marketwatch.com
[ad_2]
Source link
