Home prices are so high that nearly half of would-be home buyers say they earn too little to afford a house, according to a new survey.<\/p>\n
The survey, by Bankrate, included responses from nearly 2,300 adults, 864 of whom were aspiring homeowners. It found that 54% of respondents who were interested in buying were held back by the fact that they did not make enough.<\/p>\n
Rising home prices<\/a> and mortgage rates<\/a> are limiting how much home buyers can afford. The typical price of a home in the U.S.<\/a> was $379,100 in January, up 5.1% from the same time a year earlier.<\/p>\n With rates over 7%, the typical home buyer would need to make at least $115,000 to afford a home, according to a recent analysis<\/a> by the real-estate brokerage Redfin. That calculation assumes that a buyer is putting 20% down and is not spending more than 30% of their income on housing.<\/p>\n More than half of aspiring buyers (51%) also noted that the current cost of living was too high for them to afford a down payment and closing costs, Bankrate noted.<\/p>\n Other reasons cited for not being able to buy included owing credit-card debt (18%), not having friends or family to provide financial assistance (15%), and owing student-loan debt (10%).<\/p>\n \u201cFor prospective home buyers, debt can be the financial equivalent of quicksand suffocating capability and potentially blocking entry over the threshold of a dream home,\u201d Mark Hamrick, a senior economic analyst at Bankrate, said in a statement. <\/p>\n Housing affordability is also worsening. The U.S. continues to face a shortage of homes for sale as homeowners with rock-bottom rates hesitate to sell<\/a>.<\/p>\n Home prices are also growing faster than wages, an \u201cunhealthy\u201d trend, Lawrence Yun, the chief economist at the National Association of Realtors, said on a call with reporters discussing the report on January existing-home sales.\u00a0<\/p>\n \u201cWe don\u2019t want to see it,\u201d he added. \u201cIt is a testament to the housing shortage we are facing in America.\u201d\u00a0<\/p>\n Additionally, 20% of aspiring homeowners in the Bankrate survey said they would never be able to save enough to purchase a home, with higher shares of older respondents expressing that sentiment. Thirty-six percent of baby boomers said they would never be able to save enough to buy a home, as did 28% of Gen X-ers.\u00a0<\/p>\n That\u2019s despite the fact that boomers make up the biggest share of home buyers, at 39%, compared with other generations, according to a 2023 report<\/a> by the NAR.\u00a0<\/p>\n From the archives (November 2023):<\/strong> Housing affordability hits a 39-year low. \u2018It\u2019s fair to expect prices to weaken,\u2019 expert says.<\/a><\/p>\n<\/p><\/div>\n<\/div>\n