Renters Need To Make $66,000 A Year To Afford The Typical Apartment: Can They Buy A House Instead?

Most Americans are far from being able to afford the average house or apartment in 2024’s housing market.

The Data: According to data sourced from Redfin, U.S. renters must earn $66,000 to afford a median-priced apartment.

The only period of higher rent prices was in 2022.

The home market is even more unaffordable. According to data from the New York Times, sourced from Zillow, the annual income needed to buy the median value house is around $115,000.

That’s roughly $40,000 more than the median household’s income of $74,580 (per the U.S. Census Bureau)

Why it Matters: During the housing boom in the mid-2000s, the gap between median income and income required to buy a house was around $15,000, according to the Times. The boom, characterized by loose credit restrictions and immense speculation, was quickly followed by the collapse of subprime mortgages and the 2008 financial crisis.

The housing rut in 2024 is instead marked by insufficient supply and high interest rates. A report from Bennie Mac suggested the U.S. needed 1.5 million more houses to balance the market.

Meanwhile, home construction starts and permits granted have sunk to four-year lows. The decline is attributed to high interest rates, the expensive cost of building materials and existing residents who are preventing new housing projects.

For now, the housing market remains in a sort of purgatory.

Also Read:
• Bank of America Analyst Highlights Fed Stress Test Opacity, Varying Bank Impacts: ‘Goldman Sachs Worst Hit, Huntington Best’

Photo: Shutterstock