The United States is not an affordable place to own a home these days, and middle-class Americans are feeling the pinch.
According to a new study by ATMin 22 U.S. states and Washington D.C., homebuyers must have an income of at least six figures to afford a median-priced home.
Citing high mortgage rates, rising home prices and low housing inventory, the study found that, on average, Americans need an annual household income of $110,871 to afford the median home price in the states United States which is now $402,343 – a 46% increase from just four years ago.
Related: Barbara Corcoran says ‘now is the best time’ to buy as home prices will soon go ‘through the roof’
“Affordability is the biggest issue — finding a home that fits your budget,” said Jeff Ostrowski, a housing market analyst at Bankrate. “The higher the price of a home, the harder it is to make the down payment or qualify for the monthly payment. Home values are near all-time highs and if you want a home, you have no choice but to pay a high price.”
What is the most inaccessible state for aspiring homeowners?
It’s California, of course, where would-be homeowners must earn at least $197,057 to afford a median-priced home in the state.
According to the most recent U.S. Census data, the median household income in California for 2022 was $91,905, more than $100 less than the median income currently needed to purchase a median-priced home.
The second most unaffordable state in Bankrate’s study was Hawaii, with a median household income needed of $185,829 to afford a median-priced home.
Related: Here are the 10 most affordable states to retire
Low inventory combined with high interest rates is contributing to the country’s unaffordability crisis, experts say, but some real estate agents think that despite the tough conditions, the market won’t necessarily improve once conditions change.
“If rates go down even just another percentage point — that’s what I’m hoping for by the end of the year — prices will skyrocket,” real estate expert and “Shark Tank” star Barbara Corcoran said in an email. interview with Fox Business Network last week. “Everyone will make the market pay. And so if you wait for interest rates to drop another point, I don’t think you’re going to make money, I think you’re going to end up paying more.”
Here are the five states where buying a home is most unaffordable, according to the report:
1.California
He must earn $197,057 to afford the state’s typical monthly mortgage.
2. Hawaii
He must earn $197,057 to afford the state’s typical monthly mortgage.
3. Washington, DC
He must earn $167,871.
4.Massachusetts
He must earn $162,471.
5. Washington State
He must earn $156,814.