For most U.S. households, buying a home isn't within reach
Homeownership is increasingly unattainable for U.S. households, with only 16% of homes affordable to those earning the median income, driven by rising prices and mortgage rates.
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The dream of homeownership is increasingly unattainable for many U.S. households, as highlighted by a recent report from lending technology firm Maxwell. The median income for home buyers has risen to $96,000, surpassing the median household income of approximately $80,000. This disparity has been growing, with home buyers not only earning more but also being older and making larger down payments. According to Jessica Lautz from the National Association of Realtors, housing affordability is at its lowest in four decades, driven by rising home prices and mortgage rates. The percentage of homes affordable to those earning the local median income has plummeted from 45% four years ago to just 16% today. Experts like Daryl Fairweather and John Paasonen emphasize that even potential interest rate cuts may provide only temporary relief due to a long-standing issue of underbuilding in the housing market. This lack of supply, coupled with increased demand, is likely to exacerbate affordability challenges. To navigate this difficult landscape, experts suggest strategies such as reducing debt, saving diligently, and considering any property purchase, no matter how small, to begin building wealth.
- Homeownership is becoming increasingly unattainable for average U.S. households.
- The median income for home buyers has risen to $96,000, while the median household income is around $80,000.
- Only 16% of homes are affordable to those earning the local median income, down from 45% four years ago.
- Rising home prices and mortgage rates are key factors in declining housing affordability.
- Experts recommend reducing debt and starting to invest in property, regardless of size, to build wealth.
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