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Pay Up or Shut Up: Homebuyers Need Cash King Ransom to Score Dream Home


Homebuyers need to earn 80% more than in 2020 to afford a house in this market. It’s not just due to high mortgage rates


Housing affordability in America is facing a multifaceted challenge that extends beyond high mortgage rates.

Factors such as stagnant wages and a limited housing supply are exacerbating the issue.

Over the years, housing costs have skyrocketed while wages have failed to keep pace.

In 2020, a household earning $59,000 could afford a mortgage with a 10% down payment while spending only 30% of their monthly income.

Today, that same household would need an annual income of $106,500 to purchase a typical home, an 80% increase from January 2020.

The limited housing supply is another major culprit.

The number of new homes built has been declining due to restrictive land-use and zoning regulations.

These regulations often limit the height of buildings and the size of building lots, which makes it difficult to construct new housing units.

By easing these restrictions, local governments can encourage the development of more affordable housing options.

One of the most significant ways to improve housing affordability is to increase the housing supply.

This requires local policymakers to lower barriers for builders by easing land-use and zoning regulations.

For example, allowing for taller buildings and smaller, attached homes can help increase the housing stock without compromising on existing neighborhoods.

While addressing local zoning rules is primarily the responsibility of local governments, the federal government is working to incentivize flexibility in these areas.

By providing financial incentives to developers, the administration aims to boost the construction of affordable housing options.

In essence, tackling the housing affordability crisis requires a multifaceted approach that addresses both rising housing costs and the limited housing supply.

By encouraging the construction of new housing units and easing land-use restrictions, we can create a more affordable housing market for all Americans.

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    “Almost four years ago, a household earning $59,000 annually could afford a new mortgage without spending more than 30% of their monthly income and with a 10% down payment, according to a recent report by Zillow Group.”

    “While the typical household in 2024 makes about $81,000 a year, up from $66,000 in 2020, wages have not kept up with housing costs.”


    “Factors beyond high mortgage rates are affecting housing affordability for many Americans, according to experts.”

    “The connection between housing costs and wages has been gradually separating over the years, according to C. Kirabo Jackson, an economist and member of the White House Council of Economic Advisers.”

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