Home Affordability Hits Record High Amid Rising Prices

Nationally, homebuying affordability has maintained a record-high status over the past year, as home prices and incomes have seen parallel increases. Households now require an income of $110,000 to afford a median-priced home in the U.S. Although a gap of $22,197 still exists between the average American salary and the amount needed for a median home, this deficit has narrowed since two years ago. This improvement is attributed to typical American wages rising in tandem with housing costs.

In metro Phoenix, the situation reflects this trend. The necessary household income to afford a median-priced home in the area has been estimated at $118,462. This figure represents a 2% decrease compared to last year, offering some buyers more options. Currently, 26% of homes on the market in Phoenix are affordable for those earning this amount, though they would still allocate 37% of their monthly income towards mortgage payments, which is above the 30% threshold for affordability.