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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.