The housing market remains difficult to summarize with a single blanket statement, with so much dependent on dynamics in local metro areas and markets. As an illustration of the variety in housing market conditions, Realtor.com April housing data indicates buyers in several California metros require incomes of a quarter of a million dollars to purchase a home, while buyers in Pittsburgh require an income of just $67,000 to purchase a median-priced home.
On a national basis, the required household income to purchase the median-priced home increased by $5,900 from a year ago to $116,000 in April, according to Realtor.com. The national median priced home increased to $430,000 in April from $424,900 in March. While the median list price has remained relatively stable in the past year, the median list price grew 3.8% on an adjusted per-square-foot basis in April. Compared with April 2019, the median price on a national level has increased by 36.5%.
For prospective buyers in Los Angeles, San Diego, San Francisco, and San Jose, an income of greater than $256,000 is required to purchase the median-priced house. Boston and New York also require household incomes greater than $200,000 to purchase the median-priced home.
“California is a fascinating market not only because the income-required figures are an eye-popping quarter of a million dollars, but because it is a microcosm of the variety we’re seeing in housing markets nationally,” says Realtor.com chief economist Danielle Hale. “In areas like San Francisco, home prices have fallen enough to offset rising mortgage rates, and the income needed to buy a home has dropped. In other markets, like San Jose and Sacramento, home price declines have been more modest, and rising mortgage rates have pushed required incomes higher despite lower home prices.”
Most major U.S. markets are experiencing trends similar to Southern California, though, where rising home prices and mortgage rates have pushed required incomes for purchase higher, according to Hale. In Los Angeles, Riverside, and San Diego, the required income to purchase a home has increased by double digits compared with a year ago.
According to Realtor.com, 16 metro areas required household incomes of less than $100,000 to purchase the median-priced home, led by Pittsburgh (household income $67,000), Detroit (household income $69,000), and Cleveland (household income $71,000). Birmingham, Alabama; Buffalo, New York; St. Louis; and Rochester, New York, are among the metros that require household incomes of less than $100,000 to purchase the median-priced home.
According to Realtor.com, the South also is experiencing an increase in affordable inventory availability. The region has seen an increase in homes priced between $200,000 and $350,000 and has had overall inventory increase as well. Over half of the nation’s available inventory in April was located in the South; as a result, 45.3% of existing-home sales in the country were in that region in March, according to Realtor.com.
