How much money do you need to make to afford a house in the United States? Who is buying it – The Epoch Times

[The Epoch Times, November 18, 2023](Comprehensive report by Epoch Times reporter Zhang Ting) Owning your own property is the dream of many people. How much money do you need to earn to afford a house in the United States? The National Association of Realtors (NAR) 2023 report shows that faced with limited housing availability, high housing prices and mortgage interest rates, potential buyers need to have higher incomes than before to purchase a home.

NAR has conducted an annual survey of home buyers and sellers since 1981. The survey in the 2023 report covers housing transactions between July 2022 and June 2023.

The cost of buying a house has risen, and the average annual income of those who can buy a house has exceeded six figures.

The 2023 Home Buyers and Sellers Survey report shows that the average annual income of an average home buyer rose from $88,000 in the 2022 survey to $107,000 in 2023, the highest increase on record (about 22%). This makes buying a home unaffordable for many families in the United States, where the median income is about $75,000.

“As rising home prices and mortgage rates erode homebuyer affordability, successful homebuyers saw household incomes rise by nearly $20,000,” said Jessica Lautz, NAR deputy chief economist and vice president of research. ) said, “In a still-competitive real estate market, wealthier homebuyers are able to get their offers accepted by providing higher down payments or even paying cash.”

As a result, typical down payments for homebuyers jumped to their highest levels in two decades: 8% of the total price for first-time buyers and 19% for repeat buyers.

NAR’s 2023 report also showed that first-time homebuyers accounted for 32% of all homebuyers, up from 26% last year. Although this figure has increased, it is still below the annual average of 38% since 1981.

The 2023 report shows that the average age of first-time homebuyers is 35 years old and the average age of repeat homebuyers is 58 years old. The values ​​in the 2022 report are 36 and 59 years old respectively.

Most homebuyers say their down payment comes from their own savings. Repeat homebuyers apply the proceeds from the sale of their home to their next purchase. However, 23% of first-time homebuyers said their down payment included a gift or loan from a friend or family member.

In the 2023 survey, first-time homebuyers increased their reliance on financial assets, rising to 24% from 20% in the 2022 report. This includes selling stocks or bonds (11%), 401(k) retirement benefit plans or pensions (9%), IRA (individual retirement account) plans (2%) and selling cryptocurrencies (2%).

Surveys show most first-time homebuyers have made financial “sacrifices” to buy a home. The most common “sacrifice” is cutting back on spending on luxury goods, entertainment and clothing.

Who is buying a house?

The report shows that the composition of households that can afford to buy a house continues to change. Among recent home buyers, 59% are married couples; 19% are single women; 10% are single men; and 9% are unmarried couples. The rate of married couples fell to its lowest level since 2010.

Families with minor children face rising costs, making it more difficult for this group to buy a home. Reports show that 70% of recent home buyers do not have children under the age of 18. This is the highest rate on record. In 1985 the rate was 42%.

Recent homebuyers have also become more diverse, with the share of white buyers falling to 81% from 88% last year. Among recent homebuyers, 7% are Latino, 7% are African American, 6% are Asian or Pacific Islander, and 6% are of other races.

“Homebuyers have become more racially and ethnically diverse over the past year, with increases in the number of minority homebuyers, homebuyers born outside the United States and homebuyers whose primary language is not English,” Lowes said.

Editor in charge: Lin Yan#