It Takes a $134,000 Wage To Afford a Residence in 2024 — 14 Cities to Keep away from if You Earn Much less
If you feel that homeownership seems out of reach in today’s economic climate, it’s not your imagination. While the prices of everything have gone up in recent years, making paying for groceries, gas, and the necessities more difficult, home prices have risen even faster than the rate of inflation over the past seven decades.
Check Out: Housing Market 2024: Avoid Buying a Home in These 25 Texas Cities
Read Next: 5 Genius Things All Wealthy People Do With Their Money
Home prices since the 1960s have risen 2.4 times faster than inflation, according to a new study from Clever Real Estate. Had housing prices kept pace with inflation, the median home would cost $177,511 today, rather than $431,000, which is the median cost of a home nationwide today.
The typical home is worth 6.3 years of the median household income in the U.S., compared to 3.5 years’ worth of income in the mid-1980s. Buyers in the ’80s faced double-digit interest rates, however, which represented another obstacle to affordability.
Even so, to buy an affordable home in 2024, comparable to what you would have had to spend in the mid-’80s, you need a household income of at least $134,000. The median household income in the U.S. is only $74,580, the Clever Real Estate study pointed out. That leaves many Americans abandoning the dream of homeownership for lack of a down payment or the ability to make monthly mortgage payments.
Of course, real estate prices are highly regionalized. Some cities have it even worse. For instance, in Miami, the average home costs four times more than it did in 2000. Here are 14 major metro areas that saw home prices increase at least three-fold between 2000 and 2023.
-
Miami, Florida
-
Riverside, California
-
Los Angeles, California
-
San Diego, California
-
Tampa, Florida
-
San Jose, California
-
San Francisco, California
-
Orlando, Florida
-
Sacramento, California
-
Seattle, Washington
-
Providence, Rhode Island
-
Phoenix, Arizona
-
Portland, Oregon
-
Nashville, Tennessee
When you look at the numbers over the long term, inflation figures seem staggering. For instance, if you were to buy $20,000 worth of consumer goods in 1963, you’d have to pay $200,000 for those same products today.
Learn More: 5 Types of Homes That Will Plummet in Value in 2024
But if you were to buy a house worth $20,000 in the 1960s – which was an entirely reasonable cost — you could expect to pay roughly $480,000 today. With the high costs of homeownership, it’s no wonder that more young Americans have said they are willing to co-buy a house with a friend or family member.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: It Takes a $134,000 Salary To Afford a Home in 2024 — 14 Cities to Avoid if You Earn Less
