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US Households Require an Annual Income of $115k for a Median-priced Home

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David Brierton

David Brierton

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US Households Require an Annual Income of $115k for a Median-priced Home

In Florida, median income varies across nine metros, ranging from $88.7K in Lakeland (up 13.4% YoY) to $143K in Miami (up 33.4% YoY).

According to a report by Redfin, the median-priced U.S. home now requires an average household income of $114,627 to afford it. This is a 15% increase of $15,285 compared to the previous year, and a more than 50% increase since the beginning of the pandemic – making it the highest annual income required to buy a home on record.

Out of the nine Florida metropolitan areas mentioned in the study, six are more affordable while three are less affordable. For a median home in Lakeland, a family would need $88,639, which is still 13.4% higher than the amount needed a year ago. However, in Miami, the same family would require $143,187, which is a significant 33.4% increase from the previous year. It’s worth noting that Miami’s year-to-year
increase was the highest one in the entire United States.

Florida metro – Yearly income needed – Year-to-year change

“This is what Redfin Economics Research Lead, Chen Zhao, has to say about the current situation of the housing market: In an ideal world for homebuyers, rising mortgage rates would lead to a decrease in demand and home prices that would offset high interest payments. However, that’s not the case at present. Although new listings are slightly increasing, inventory is still at a record low as homeowners hold on to their low mortgage rates. This is keeping the prices up.”

For those who are looking to purchase a home, especially first-time buyers who are eager to do so at the moment, it may be beneficial to consider alternative options. Condos or townhouses could be a more affordable alternative to a single-family home, and moving to a more reasonably priced area or suburb could also be worth considering.

The monthly mortgage payment for the average U.S. homebuyer has now reached an all-time high of $2,866, which is a 20% increase from $2,395 just a year ago. By comparison, in August 2020 the typical monthly payment was $1,581, based on that month’s average mortgage rate of 2.94% and median home price of $329,000.

According to the most recent data available from 2022, the average American household earns approximately $40,000 less than what is needed to purchase a home at the median price, which is roughly $75,000. Although hourly wages increased in 2023, the rate of increase was not as high as the required income to afford a home.


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