Published by FOX Business | April 1, 2024
The annual earnings required to afford a median-priced home, which Bankrate lists at $402,343, rose 46% between January 2020 and January 2024.
Homes in the United States have become increasingly unaffordable during President Biden’s term in office, with one study showing that buyers in nearly half of the 50 states needed a six-figure salary to afford a median-priced home in January.
While the Biden administration touts how it has “made progress” toward delivering the reality of homeownership for Americans nationwide, it also acknowledges that housing costs are still too high for many potential homeowners, calling it an “inherited” issue.
As Biden nears the end of his term, however, a study by Bankrate shows that the number of states that require a six-figure salary to own a median-priced home has increased from six, plus Washington, D.C., in January 2020 – a full year before Biden took office – to 22 states plus the nation’s capital in January 2024. The study listed a median-priced home at $402,343 per real-estate brokerage Redfin.
To afford such a home, aspiring homeowners must earn $110,871 annually, a 46% increase from January 2020, according to the report.
“Affordability is the biggest issue – finding a home that’s in your budget,” said Bankrate housing market analyst Jeff Ostrowski. “The higher the price of a home, the harder it is to come up with the down payment or to qualify for the monthly payment.”
The states that have seen the highest increases in required annual income are Montana (+77.7%), Utah (+70.3%), Tennessee (+70.1%), South Carolina (+67.3%), and Arizona (+65.3%), according to the report.
The five states that have seen the lowest rises are North Dakota (+9.2%), the District of Columbia (+24.6%), Louisiana (+24.9%), Illinois (+27.2%), and Kansas (+29.3%).
The study also found the states that require the most annual income to purchase a typical home in 2024 are largely located in the West and Northeast. The top five are California ($197,057), Hawaii ($185,829), D.C. ($167,871), Massachusetts ($162,471), and Washington ($156,814).
Meanwhile, the five states that require the least annual income to afford a typical home in 2024 are: Mississippi ($63,043), Ohio ($64,071), Arkansas ($64,714), Indiana ($65,143), and Kentucky ($65,186).
Despite wages growing 4.3% in February, rising home prices are still outpacing what Americans can afford.
