The least affordable markets were Anaheim and San Francisco, where homebuyers with the typical local income would’ve needed to spend over 80% of their pay on monthly housing costs. Detroit and Pittsburgh were the most affordable
(Yahoo) (BUSINESS WIRE)–(NASDAQ: RDFN) — 2023 has been the least affordable year to buy a home in Redfin’s records, but things are looking up for 2024, according to a report from Redfin (redfin.com), the technology-powered real estate brokerage.
Someone making the $78,642 median U.S. income in 2023 would’ve had to spend 41.4% of their earnings on monthly housing costs if they bought the $408,806 median-priced U.S. home. That’s the highest share on record and is up from 38.7% in 2022.
Data for 2023 goes through October, while data from past years spans the full year. When Redfin refers to a record high, that is referencing records dating back to 2012.
The typical 2023 homebuyer needed to earn an annual income of at least $109,868 if they wanted to spend no more than 30% of their earnings on monthly housing payments for the median-priced home. That’s a record high—up 8.5% from 2022—and is $31,226 more than the typical household makes in a year.
“A perfect storm of inflation, high prices, soaring mortgage rates and low housing supply caused 2023 to go down as the least affordable year for housing in recent history,” said Redfin Senior Economist Elijah de la Campa. “The good news is that affordability is already improving heading into the new year. Mortgage rates are coming down, more people are listing homes for sale, and there are still plenty of sidelined buyers ready to take a bite of the fresh inventory. We expect these conditions to continue to improve in 2024.”
Homebuyers’ monthly payments have grown more than twice as fast as wages
Housing affordability has dwindled because wages haven’t increased as quickly as homebuying costs. The median monthly housing payment for homebuyers in 2023 was a record $2,715, up 12.6% from 2022. Over the same period, the median household income rose just 5.2% to an estimated $78,642—also a record high, but not high enough to offset the jump in housing costs.
