Home prices have seen a significant increase of 42% since 2020. The rise in both mortgage rates and borrowing costs has made it more challenging to afford a home in today’s market. As a result, prospective buyers need to earn 80% more than they did four years ago to comfortably purchase a home.
Median incomes have only risen by 23% over the same period, leaving many people unable to enter the housing market. In 2020, a household earning $59,000 per year could afford a typical home priced at $240,815. At that time, this income level was below the US median income of $66,000, meaning more than half of American households had sufficient funds to buy a home without overextending their budgets.
Today, those shopping for a home need to earn $106,000 annually to afford a median-priced home at $342,941. This is $47,000 more than they needed to earn in 2020 to afford a home and well above the current average income of $81,000.
A recent Zillow analysis has shown how difficult it has become to break into homeownership as the cost of purchasing a home has outpaced income growth, pushing hopeful buyers out of the market. In fact, only a handful of major metropolitan areas were found to be affordable at the median income. Zillow defines affordability as spending no more than 30% of your income after offering a 10% down payment.
Monthly mortgage payments have nearly doubled over the past four years, with today’s typical buyer facing a monthly payment that is 96% higher compared to 2020 levels. This equates to an average payment of $2,200 per month with a 10% down payment.
The main factors behind this increase are the significant rise in home values and mortgage rates. Mortgage rates have gone up from around 3.5% in early 2020 to between 6.5% and 7% so far this year. Limited housing supply has also contributed to the issue.
In 2023, buyers needed an income of $97,000 to afford a typical home, up from $86,000 in 2022. This was $22,000 above last year’s median household income of $75,000.
“The income needed to comfortably afford a typical home is now six figures,” said Orphe Divounguy, chief economist at Zillow. “It’s a big increase that’s due to a combination of higher prices, mortgage rates, and limited supply.”
Neither mortgage rates nor home prices are expected to ease anytime soon, with economists from Fannie Mae predicting rates to drop to 6% by the end of the year and Zillow forecasting home prices to increase by 0.9% over 2024 to an average of $349,611.
Younger buyers are also facing challenges, as the pressure of affordability has delayed their entry into homeownership. It now takes 8.5 years for a household making the median income to save enough for a 10% down payment, a year longer than it would have in 2020. The average age of first-time homebuyers has also risen from 31 to 36 in the past five years.
To overcome these hurdles, buyers are turning to strategies such as “house hacking” and seeking financial assistance from friends and family. In 2023, 21% of those who purchased reported getting financial help from friends or family, according to Zillow.
In conclusion, the affordability of homes has significantly decreased in recent years, with the income required to purchase a home outpacing wage growth. This has resulted in many prospective buyers being priced out of the market and forced to employ creative strategies to afford a home.
Article generated from corporate media reports.
Why One Survival Food Company Shines Above the Rest
Let’s be real. “Prepper Food” or “Survival Food” is generally awful. The vast majority of companies that push their cans, bags, or buckets desperately hope that their customers never try them and stick them in the closet or pantry instead. Why? Because if the first time they try them is after the crap hits the fan, they’ll be too shaken to call and complain about the quality.
It’s true. Most long-term storage food is made with the cheapest possible ingredients with limited taste and even less nutritional value. This is why they tout calories so much. Sure, they provide calories but does anyone really want to go into the apocalypse with food their family can’t stand?
This is what prompted the Llewellyns to launch Heaven’s Harvest. They bought survival food from multiple companies and determined they couldn’t imagine being stuck in an extended emergency with such low-quality food. They quickly discovered that freeze drying food for long-term storage doesn’t have to mean sacrificing flavor, consistency, or nutrition.
Their ingredients are all-American. In fact, they’re locally sourced and all-natural! This allows their products to be the highest quality on the market, so good that their customers often break open a bag in a pinch to eat because they want to, not just because they have to due to an emergency.
At Heaven’s Harvest, their only focus is amazing food. They don’t sell bugout bags, solar chargers, or multitools. They have one mission – feeding Americans in times of crisis.
What they DO offer is the ability for people to thrive in times of greatest need. On top of long-term storage food, they offer seeds to help Americans for the truly long-term. They want them to grow their own food if possible which is why they offer only Heirloom, Non-GMO, Non-Hybrid, Open-Pollinated seeds so their customers can build permanent food security on their own property.
