Americans now need to earn nearly $108,000 a year to buy a single-family home in most cities, according to a new economic report.
Oxford Economics revealed this week that households in 2024 will need an average annual income of $107,700, including property taxes and home insurance, to buy a new single-family home. This number was almost double the cost five years ago in 2019, which was just $56,800.
The report added that only 36% of households earned enough income to buy a home last quarter, down from 59% of households able to afford a home in 2019.
“Housing affordability has declined significantly in all major metropolitan areas over the past five years as home prices have soared and mortgage rates have nearly doubled,” the report summarizes.
The most affordable cities included San Jose, San Francisco, Los Angeles, San Diego, and Honolulu, each with less than 15% of households able to cover their housing costs. Among the 50 largest cities, the least expensive cities were in the Midwest and South, including Cleveland, Louisville, Detroit, St. Louis, Oklahoma City, and Memphis.
Housing costs in these cities range from $64,600 to $75,300, and about half of households in these areas earn enough to buy a home.
The most affordable city in the study was Decatur, Illinois. Cumberland, Maryland. Youngstown, Ohio. Charleston, West Virginia. and Elmira, New York. In these cities, nearly two-thirds of households could afford a single-family home.
In 2024, housing costs repeatedly broke records. In June, Redfin found that the median home sales price in the U.S. rose to $394,000, an increase of 4.4% from the same period last year.
A separate report from the National Association of Realtors (NAR) Annual Survey of Buyers and Sellers found that the percentage of first-time homebuyers will drop from 32% in 2023 to 24% in 2024, compared to the NAR's 1981 This is the lowest percentage since data collection began.
