According to a poll, over half of prospective homeowners claim their income prevents them from affording a home.
According to Bankrate, 25% of prospective homeowners believe they would never be able to save enough money for a house.
According to a recent poll, over half of prospective homeowners claim they make too little money to purchase a home since property values are so high.
Approximately 2,300 persons responded to the Bankrate poll, 864 of whom wanted to become homeowners. It was shown that 54% of respondents who were considering purchasing were discouraged by their insufficient income.
The amount that purchasers can pay is being restricted by rising mortgage rates and property prices. In the United States, the average cost of a house was $379,100 in January, a 5.1% increase over the same month the previous year.
In order to purchase a property with rates above 7%, the average home buyer would need to earn at least $115,000, said a recent estimate by the real estate agency Redfin. That computation makes the assumption that a buyer will put down 20% of the purchase price and will not exceed 30% of their take-home pay.
According to Bankrate, over half (51%) of prospective homeowners said that their present cost of living made it impossible for them to pay for closing expenses and a down payment.
Other reasons given for not being able to purchase included having debt from credit cards (18%), not having financial support from friends or family (15%), and having debt from school loans (10%).
Mark Hamrick, a senior economic analyst at Bankrate, said in a statement that “for prospective home buyers, debt can be the financial equivalent of quicksand suffocating capability and potentially blocking entry over the threshold of a dream home.”
The affordability of homes is also getting worse. Homeowners with extremely low rates are reluctant to sell, which contributes to the ongoing housing crisis in the United States.
In a conference call with reporters to discuss the January existing-home sales data, Lawrence Yun, the senior economist of the National Association of Realtors, called the pattern of home prices rising faster than incomes “unhealthy.”
He said, “We don’t want to see it.” “It is evidence of the housing scarcity that America is currently experiencing.”
Furthermore, 20% of prospective homeowners in the Bankrate study expressed the belief that they would never be able to save enough money to buy a property, an attitude that was more prevalent among older respondents. A staggering 36% of baby boomers and 28% of Gen Xers expressed their inability to save enough money to purchase a home.
This is true even though, in comparison to other generations, boomers account for the largest percentage of house buyers (39%), according to a 2023 NAR research.