Tuesday, May 21

Report: $76K salary needed to buy starter home as down payments surge

Are you a first-time homebuyer looking for a starter home? According to new data from Redfin, it takes an income of about $76,000 a year to afford a basic starter home in the U.S. as of February. 

That is up by over 8% in the last year, Redfin said. Four years ago, the typical American needed just over $40,000 a year to afford a starter home. 

One major factor is the amount needed for down payments has increased. The typical down payment on a home reached $56,000 in February, which is up by 24% from one year earlier. 

Homebuyers are doing whatever they can to pull together a large down payment in order to lower their monthly payments moving forward, Rachel Riva, a Redfin real estate agent, said in a press release. The smallest down payment Ive seen recently is 25%. I had one client who put down 40%.

SEE MORE: This US city is selling vacant homes for $1 each, but here’s the catch

According to Redfin, the typical starter home sold for $240,000 in February, up 3.4% from 2023. Monthly payments for a starter home stood at $1,896 in February, up 8.2% from a year earlier, Redfin said. 

The pandemic housing-market boom changed the definition of a starter home, said Redfin senior economist Elijah de la Campa. A decade ago, many people thought of a starter home as a small three-bedroom single-family house. Now that type of home could cost seven figures, especially in expensive parts of the country. The most affordable homes are much smaller and often require a lot of work to make them habitablewhich makes them cost even more.”

As homes become more expensive, population and job growth are seen as major reasons why middle-class Americans are struggling to afford to buy a home. 

The National Association of Realtors said existing-home sales surged 9.5% in February, with the median home price going up 5.3% from February 2023 to February 2024. 

“Additional housing supply is helping to satisfy market demand,” said NAR chief economist Lawrence Yun. “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”

Trending stories at Scrippsnews.com

‘Disbelief’ after man fatally shoots friend in attempt to ‘be funny’ Florida Gov. Ron DeSantis signs law squashing squatters’ rights Man accused of murdering 3 sons enters insanity plea

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *