US home affordability sees the first improvement since June 2020

Posted on September 25, 2024   |  

According to Redfin, US homebuyers now need an annual income of $115,454 to afford a median-priced home, valued at $433,101, which is a 1.4% decrease from last year.

This marks the first yearly decline in the income needed to buy a home since June 2020, when mortgage rates hit a historic low.

A home is considered affordable if the buyer spends no more than 30% of their income on monthly mortgage payments.

The drop in required income is due to mortgage rates decreasing for the first time in three years, with the average rate for a 30-year mortgage falling to 6.5% in August from 7.07% last year.

Mortgage rates have since dipped further to 6.09%, making it easier for some buyers to afford homes.