The average American now needs 46% more income than a year ago to buy a home
This year the amount of monthly payments to acquire a home in the United States increased considerably.
Photo: Joe Raedle / Getty Images
High mortgage rates, the increase in the cost of living and the fact of facing the highest inflation rate in decades, It has complicated the outlook for millions of Americans who wanted to buy a home this year.
Now, people interested in investing in real estate in the long term must demonstrate that they receive more income, otherwise it will be difficult for them to access a loan.
Just to acquire a modest house in the United States through a mortgage, the interested party must receive at least $254,281 annual dollars, because only then would you be able to cover an average monthly payment of $2, 682 dollars, which is quite high if one takes into account that last year it was only required to guarantee income of $70,286 dollars, that is to say that currently required 70.6% more financial solvency.
While it is true that mortgage rates have more than doubled in the last 21 months, the average wage per hour at the national level has only grown around 5%, a disproportionate figure between what is received and the objectives that are intended to be achieved through said amount of money.
According to Information released by Redfin Corporation, a specialist residential real estate firm in 95 markets in the United States, from February of 2020 through October 2022, the monthly payment of an average American who buys a mid-level house, increased approximately 70%.
(1/ 6) Pending home sales fell the most on record in October while deal cancellations and price cuts hit record highs as buyers were spooked by the biggest mortgage-rate jump in over four decades.
This historic slowdown may ease if inflation continues to cool. #housingmarket
—Redfin (@Redfin) November 30, 2020
Under this scenario, those interested in buying a home are now looking for it in areas further away from the big cities, because sometimes that alone makes them more affordable.
Contrary to the desire of those interested in acquiring a home in the future, it is unlikely that home prices will fall in the long term.
It should be noted that San Francisco and San José, California, are the cities in the country where potential buyers of a typical home are required to have the highest income nationwide, because you must earn $ 281, 286 Dollars per year in order to cover the average monthly mortgage payment of $6,286 dollars.
In this sense, a monthly mortgage payment is considered affordable if the homebuyer does not spend more than 30% of your housing income.
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