Economic Report: The median income needed to buy a typical home is over $88,000 — $40,000 more than before the pandemic

by | Nov 10, 2022 | Stock Market

The growth of home prices in big cities has slowed but not stalled in the third quarter, according to a new report from the National Association of Realtors. The NAR, which looked at prices for single-family homes in 185 U.S. cities, found that prices increased in nearly every metro area.

“The median income needed to buy a typical home has risen to $88,300 — that’s almost $40,000 more than it was prior to the start of the pandemic, back in 2019,” Lawrence Yun, chief economist at the NAR, said in a statement.

“With a 20% down payment, the mortgage payment on a typical existing single-family home was $1,840, up 50% from a year ago.”

With a 20% down payment, the monthly mortgage payment on a typical existing single-family home was $1,840, up 50% from a year ago, the NAR added. Out of 185 markets, 181 saw prices go up in the third quarter, the NAR said. And compared with a year ago, the national median price for an existing single-family home rose much more slowly, by 8.6%, to $398,500.  “The more expensive markets on the West Coast will likely experience some price declines following this rapid price appreciation, which is the result of many years of limited home building,” Yun said.  “The Midwest, with relatively affordable home prices, will likely continue to see price gains as incomes and rents both rise,” he added. While home prices went up across America, the pace of the increase has slowed: Only 46% of metropolitan areas posted double-digit annual price appreciation, compared with 80% in the last quarter, according to the NAR. Higher mortgage rates, particularly with the 30-year rate above 7%, have hit buyers hard, and demand for homes has plunged. Here are the …

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