Homebuyers Are Spending More of Their Incomes on Home Purchases Than They Did a Year Ago
Buying a home requires substantially more money than it did just a year ago, especially in metros like North Port, FL, where the income necessary to afford a home purchase has increased 73.9% year-over-year. Mortgage rates have more than doubled nationwide over the last 12 months, and elevated borrowing costs paired with historically high home prices mean that today’s homebuyer must earn $107,281 annually to afford a $2,682 monthly mortgage payment on the typical U.S. home, Redfin reports.
While that figure is up 45.6% from $73,668 a year ago, some Sun Belt metros are seeing even larger annual increases in income required to buy a home. Apart from North Port, the priciest metro on the list, Florida is home to three other metros in the top five regional markets with the largest year-over-year gains: Miami, where homebuyers need to earn $128,892, up 63.7% year-over-year, Tampa ($101,682, up 62.4%), and Cape Coral ($104,943, up 60.6%).
Buyers need to earn at least 50% more income to afford a home than they did a year ago in 40 of the 93 metros included in this analysis. They need to earn at least 30% more in all 93.
Lake County, IL–near Chicago–had the smallest gain in income necessary to afford the median-priced home, though buyers still need 33.5% more than a year ago.
The Bay Area also had smaller-than-average increases, but the income necessary to buy there is still enormous. Buyers need to earn $402,821 to pay San Francisco’s typical $10,071 monthly mortgage payment, up 33.6% from a year ago.