Affordability issues have plagued the housing market for the better part of the past decade, but they haven’t gotten any worse in 2024. This is the conclusion of a new report that appears Redfin, which said housing availability did not fall significantly last year, the first time that has happened in four years.
Taking the US median income of $83,782 and comparing it to the median home value of $429,734, a household in that situation would spend 41.8% of their income on housing in 2024. That’s a slight improvement from 42.2% in 2023 but higher than the average figure of 30% or less during the 2010s.
Despite recent improvements, Redfin noted that affordability challenges continue to persist and are likely to continue.
“Affordability has improved significantly this year because wage growth has outpaced monthly housing cost growth, but that doesn’t mean buying a home has become affordable,” Redfin senior economist Elijah de la Campa said in a statement.
“For many Americans, buying a home remains more out of reach than ever before and that’s not likely to change anytime soon. Even though inventory is rising, we still expect prices to continue rising through 2025 due to a lack of real estate – forcing many potential homebuyers to rent. “
In order for the average consumer to allocate 30% of their income to housing, they would need to have an annual income of $116,782, a record high. The median monthly mortgage payment reached $2,920 by 2024.
While Texas was a hot spot after the start of the COVID-19 pandemic, rising supplies and stagnating housing prices helped to increase affordability in 2024. Redfin data shows that income and home prices in Austin would require a family to spend 39.6% of their income. in homes, down from 42.8% in 2023.
San Antonio (35.4%), Dallas (38.9%) and Fort Worth (36.7%) each saw their share of the income needed to afford housing decline between 1.6 and 2.3 percent last year.
Redfin’s report is a little more encouraging, but housing market forecasts for 2025 still expect prices to rise. HousingWire’s the forecast expects a 3.5% decline in home prices. In the upper section, Goldman Sachs predicts a 4.4% rise in house prices, while at the low end, Moody’s calculations expected to rise by 0.3%.
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