FOX Business’ Jerry Willis reports on the rise in home ownership costs over the past four years.
Housing in the United States is becoming increasingly unaffordable. President Biden’s term One study found that buyers in nearly half of 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 bringing the reality of homeownership to Americans across the country, it also acknowledges that housing costs remain too high for many potential homeowners. and calls it a “genetic” problem.
But as Biden’s term draws to a close, the number of states requiring a six-figure salary to own a median-priced home has increased from January 2020 to six, according to Bankrate research. It is shown that the increase is starting from the states that include Washington, DC. Twenty-two states and the nation’s capital were targeted in January 2024, a year before Biden took office. The survey found that the median home price per real estate agent, Redfin, was $402,343.
To afford such a home, a prospective homeowner would need to earn $110,871 a year, a 46% increase from January 2020, according to the report. .
Real estate faces housing affordability crisis as would-be homeowners struggle with cost of living and low incomes
The number of states that require a six-figure salary to buy a median-priced home increased from six states in January 2020 to 23 states in January 2024. (Fox News/Fox News)
“The biggest issue is affordability. Finding a home within your budget,” said Jeff Ostrovsky, a housing market analyst at Bankrate. “The more expensive a home is, the harder it is to come up with a down payment or qualify for a monthly payment.”
The annual income required to buy a median-priced home, listed at $402,343 on Bankrate, increased by 46% between January 2020 and January 2024. (Fox News/Fox News)
States with the largest 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 with the lowest increases were North Dakota (+9.2%), District of Columbia (+24.6%), Louisiana (+24.9%), Illinois (+27.2%), and Kansas (+ 29.3%).
The study also found that the states that will require the most annual income to buy a typical home in 2024 are primarily located in the West and Northeast. The top five are California ($197,057), Hawaii ($185,829), Washington DC ($167,871), Massachusetts ($162,471), and Washington ($156,814). .
The five states with the highest income requirements to purchase a typical home are California, Hawaii, Washington DC, Massachusetts, and Washington. (Fox News/Fox News)
Meanwhile, the five states with the lowest annual income required to purchase a typical home in 2024 are Mississippi ($63,043), Ohio ($64,071), and Arkansas ($64,714). ), Indiana ($65,143), and Kentucky ($65,186).
The five states with the lowest income requirements to purchase a typical home are Mississippi, Ohio, Arkansas, Indiana, and Kentucky. (Fox News/Fox News)
Even though wages rose 4.3% in February, home price increases still exceed what Americans can afford.
Home foreclosures are skyrocketing nationwide, with the fastest increases occurring in these five states
“Home price growth has historically outpaced wage growth, making housing unaffordable,” Ostrovsky said.
The median home price in February 2024 was $412,227, up from $290,264 in January 2020, according to Redfin data. (Fox News/Fox News)
Ostrovsky said supply and demand are factors in the rapid rise in home prices.
“For the past few years, the supply of housing has been constrained by a number of factors, including weak housing construction and lock-in effects,” Ostrovsky said. “However, demand for housing is increasing and there are more buyers than sellers.”
Rising mortgage rates have also reduced supply as potential sellers locked in 2% or 3% mortgage rates are hesitant to sell and take advantage of higher mortgage rates for new home purchases. Limited.
High mortgage rates and limited housing supply are also impacting housing affordability, according to the study. (license/image)
When Biden took office in January 2021, the average interest rate on a 30-year fixed-rate mortgage hit a new low of 2.5%. As of March 20, these rates stood at 7.07%, according to a Bankrate survey of large financial institutions.
Voters will weigh housing affordability in 2024
Housing affordability could be a focus for voters heading into the 2024 presidential election. A recent Redfin survey found that more than half of the 3,000 homeowners and renters who participated agreed that this issue would influence their voters in November.
Biden last month announced a series of initiatives to improve affordability as he seeks re-election.
Part of his efforts include asking Congress to pass the Mortgage Relief Credit, which would give middle-class first-time homebuyers a $5,000 annual tax credit for two years. He also wants Congress to provide up to $10,000 in one-year tax credits to middle-class families who sell their starter homes.
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The Biden administration is also asking Congress to pass legislation to build and renovate more than 2 million homes to close the housing supply gap and reduce costs for renters and buyers.
Fox Business’ Daniella Genovese contributed to this report.
