Report Illustrates How Sharply Home Costs Have Risen

Americans need to earn six figures in 23 states and territories to afford a house
By Gina Carey,  Newser Staff
Posted Apr 7, 2024 5:30 PM CDT
Homebuyers Need 6-Figure Salary in Nearly Half of States
A sale sign stands outside a home in Wyndmoor, Pennsylvania.   (AP Photo/Matt Rourke, File)

Anxiety over the US housing market's surging prices is summed up succinctly in a new report from Bankrate. They write that since 2020, the number of households needing to earn six figures to afford a home has skyrocketed from seven states and territories to 23 today. The five highest:

  1. California: $197,057
  2. Hawaii: $185,829
  3. Washington, DC: $167,871
  4. Massachusetts: $162,471
  5. Washington: $156,814

  • Other 18: Per CNN, the 18 other states requiring six-figure incomes to afford homes were: Colorado ($152,229), New Jersey ($152,186), New York ($148,286), Utah ($133,886), Rhode Island ($132,343), Montana ($131,357), New Hampshire ($130,329), Oregon ($129,129), Connecticut ($119,614), Florida ($114,771), Idaho ($114,386), Vermont ($114,471), Nevada ($111,557), Arizona ($110,271), Maryland ($108,257), Virginia ($106,971), Maine ($102,557), and Texas ($100,629).
  • What's 'affordable' mean? Bankrate's parameters on affordability assume that home buyers pony up a 20% down payment and take out a 30-year fixed rate mortgage, and that those mortgage payments won't exceed 28% of their income. Bankrate Housing Market Analyst Jeff Ostrowski said finding an affordable home was the key problem for most. "Home values are near record highs, and if you want a house, you have little choice but to pay a high price."
  • Do Americans earn enough to buy? While incomes vary greatly by state, according to the US Census Bureau, the median household income of Americans in 2022 was $74,580, a 2.3% decline from 2021's estimated $76,330.
  • Most affordable: The states with the lowest income needed to afford homes are Mississippi, $63,043; Ohio, $64,071; Arkansas, $64,714; Indiana, $65,143; Kentucky, $65,186. In general, homes in the Sun Belt and Rust Belt were most affordable.
(Big changes to how much realtors get paid could make things cheaper for home buyers.)

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