According to a recent analysis by Redfin, housing costs in the U.S. are skyrocketing, outpacing median household incomes and making it increasingly difficult for potential buyers to afford a home. The report reveals that the average household would need to earn $113,520 a year to afford the typical house, a staggering figure that highlights the affordability crisis facing many Americans.
Since the onset of the pandemic, affordability has collapsed even further, with the average household falling short $29,448 to afford a home. This has led to a cautious approach from potential buyers, especially in the wake of recent layoffs in the technology industry that have affected consumer attitudes towards making big financial commitments.
Experts are advising price-sensitive buyers to consider purchasing starter homes, which require a more modest income of about $76,000 a year. However, these entry-level homes are becoming increasingly rare, as home builders have shifted their focus to building more high-end properties.
Despite these challenges, there are still 13 metropolitan areas in the U.S. where buyers might be able to afford a home without earning a six-figure salary. Places like Detroit, Cleveland, and Pittsburgh offer more affordable housing options for those looking to break into the market.
As the affordability crisis continues to loom over the housing market, the future remains uncertain. Without significant changes to address the widening gap between incomes and housing costs, many Americans may find themselves priced out of the market entirely.
