Buying a home in nearly half the country requires a six-figure salary — up from six states that required the same income just four years ago, according to a recent report.
The analysis by financial services firm Bankrate found that 22 states and Washington, DC, require buyers to make upwards of $110,871 to comfortably afford a median-priced home of $402,343.
In 2020, meanwhile, Americans only needed to make a salary that high in six states, as well as the District of Columbia, to afford the average home.
Those seeking to buy homes in California, Hawaii, DC, Massachusetts and Washington state need to earn the most to buy a typical home, between $156,814 and $197,057, according to Bankrate’s findings that were earlier reported on by CNN.
“Affordability is the biggest issue,” said Jeff Ostrowski, Bankrate’s housing market analyst. “The higher the price of a home, the harder it is to come up with the downpayment or to qualify for the monthly payment.”
At the same time, “homes have become less affordable because home price appreciation has so far outpaced wage growth,” Ostrowski told CNN.
Mortgage rates have also skyrocketed since the pandemic — a result of stubbornly high interest rates that make it more expensive for banks to borrow capital.
Federal Reserve officials have kept interest rates at their current 22-year high, between 5.25% and 5.5%, since their July 2023 policy meeting.
According to Freddie Mac, the average 30-year fixed-rate mortgage rate was a whopping 6.79% as of Thursday — nearly double what it was four years ago.
