The current housing market reveals a stark contrast between the income required to own a home, estimated at $118,530 annually, and the median household income of $78,538. As mortgage rates remain elevated post-pandemic and home prices have soared by 30% in five years, the American dream of home ownership may appear increasingly elusive. Even though mortgage rates are predicted to decrease slightly in 2025, overall housing costs are unlikely to decline, maintaining a significant affordability gap which is pushing first-time homebuyers to older ages, now averaging 38 years.
The average U.S. household needs $118,530 yearly income to afford a home, while the median income is only $78,538, indicating a significant affordability gap.
Home prices have surged 30% in five years, coupled with elevated mortgage rates, making home ownership seem increasingly unattainable for many Americans.
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