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Home Buying Costs Skyrocket: Income Needs Soar
20 Jul
Summary
- Qualifying income for a median home jumped $15,600 since January.
- Existing home sales contracts fell 5.4% in June, the steepest drop.
- Builder confidence is at its lowest point since 2012.
Buying a home this summer presents a stark challenge, with affordability declining monthly since January. The income required to qualify for a mortgage on a median-priced single-family home increased by $15,600 between January and June, reaching $109,152 annually.
This affordability squeeze led to a 5.4% decrease in signed contracts for existing homes in June, marking the sharpest monthly decline this year. Concurrently, homebuilder confidence has languished at levels not seen since 2012, impacting how the industry adapts to diminished buyer demand.
While mortgage rates have slightly eased year-over-year, rising home prices continue to push the qualifying income higher. Data from the National Association of Realtors indicates a persistent downward trend in the Housing Affordability Index for five consecutive months.
Homebuilder confidence specifically fell to 34 in July, indicating prolonged industry challenges. This situation creates an opening for new construction to compete against the struggling resale housing market.
