Americans need six-figure salaries to afford housing in most cities, a new economic report says
Pulte Capital CEO Bill Pulte predicts rising housing prices and says that until supply increases, higher housing prices will be seen.
Americans need to earn about $108,000 a year to buy a single-family home in most cities now, according to a new economic report.
Oxford Economics revealed this week that a family in 2024 needs an annual income of $107,700 to buy a new single-family home, including property taxes and home insurance. This number was nearly double what it cost five years ago in 2019, at just $56,800.
The report added that only 36% of households had enough money to buy a house last quarter, which is a significant drop from the 59% of households that could afford one in 2019.
HIGH COSTS TO BEAT RECORD HIGHS, HARVARD UNIVERSITY REPORT SAYS
“Housing costs have fallen significantly over the past five years in all major cities as house prices have risen and mortgage prices have nearly doubled,” the report concluded.
Oxford Economics found that the most expensive cities were in California. (Steve Pfost/Newsday RM via Getty Images/Getty Images)
The most affordable cities include San Jose, San Francisco, Los Angeles, San Diego and Honolulu, where less than 15% of households can afford their housing costs. Of the 50 largest cities, the most affordable were in the Midwest and South, such as Cleveland, Louisville, Detroit, St. Louis, Oklahoma City and Memphis.
Housing costs in those cities ranged from $64,600 to $75,300, with nearly half of households in these areas earning enough to own a home.
The most affordable cities from the survey were Decatur, Illinois; Cumberland, Maryland; Youngstown, Ohio; Charleston, West Virginia; and Elmira, New York. About two-thirds of households could afford a single-family home in these cities.
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A “For Sale” sign on a house in Philadelphia, Pennsylvania, US, on Friday, Aug. 16, 2024. (Joe Lamberti/Bloomberg via Getty Images/Getty Images)
Housing costs have repeatedly broken records in 2024. In June, Redfin findings showed that the median US home sales price rose to $394,000, a 4.4% increase from the same time last year.
Another report from the National Association of Realtors’ (NAR) annual survey of buyers and sellers found that the share of first-time home buyers fell from 32% in 2023 to 24% in 2024, the lowest share since NAR began collecting data in 1981.
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