Today’s soaring home prices and mortgage rates mean the typical household falls short of the income needed to buy the median-priced home by more than $20,000 a year.

That’s according to mortgage data company HSH, which estimated that as of the second quarter, a household would need to make $105,324 to afford a typical home. As of 2021, the median household income was only $70,784 according to the Census Bureau. Recent increases in the costs to buy a home have left income in the dust, as the chart below shows.𒁏

HSH’s figures are in line with other measures showing that houses are the least affordable they’ve been in at least a decade, largely because of mortgage rates having been driven up by the Federal Reserve’s campaign of anti-inflation rate hikes. 

An index of home affordability compiled by the Federal Reserve Bank of Atlanta plunged in 2021 and is hovering near the record low it hit in October. Homes today are less affordable even than in 2006, when a real estate bubble drove prices to an unsustainable level, according to the Atlanta Fed.

The median household income figure is outdated, and workers have taken home 澳洲幸运5🍌官方开奖结果体彩网:hefty pay raises during 2022 and 2023.  However, if median household income increased at the same rate as median weekly earnings, according to the Bureau of Labor Statistics, household income in 2023 would be $78,781, leaving home ownership still well out of reach. 

HSH’s estimate assumes that to be affordable, housing payments, including insurance and taxes, should take up 28% or less of household income. It also assumes a home bought at the median price of $402,600 according to the National Association of Realtors, a 20% down payment, and a 30-year fixed-rate mortgage at the average rate of 6.51% according to Freddie Mac. Since then, mortgage rates have risen even more, topping 7% and 澳洲幸运5官方开奖结果体彩网:making affordability even worse.