{"id":9429,"date":"2024-04-10T12:07:04","date_gmt":"2024-04-10T17:07:04","guid":{"rendered":"https:\/\/nwfl4sale.com\/buyers-getting-creative-for-home-purchases\/"},"modified":"2024-04-10T12:07:04","modified_gmt":"2024-04-10T17:07:04","slug":"buyers-getting-creative-for-home-purchases","status":"publish","type":"post","link":"https:\/\/nwfl4sale.com\/buyers-getting-creative-for-home-purchases\/","title":{"rendered":"Buyers Getting Creative for Home Purchases"},"content":{"rendered":"
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More hopeful buyers are partnering with family or friends or renting rooms to achieve the goal of homeownership. Analysts say more homes need to be built in the U.S.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/div>\n NEW YORK \u2013 Home shoppers today need to make more than $106,000 to comfortably afford a home, a new Zillow analysis finds. That is 80% more than in January 2020, showing how the math has changed for hopeful buyers, who are more often partnering with friends and family or \u201chouse hacking\u201d their way to homeownership.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n In 2020, a household earning $59,000 annually could comfortably afford the monthly mortgage on a typical U.S. home, spending no more than 30% of its income with a 10% down payment. That was below the U.S. median income of about $66,000, meaning more than half of American households had the financial means to afford homeownership.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Now, the roughly $106,500 needed to comfortably afford a typical home is well above what a typical U.S. household earns each year, estimated at about $81,000.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cHousing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,\u201d said Orphe Divounguy, a senior economist at Zillow. \u201cBuyers are getting creative to make a purchase pencil out, and long-distance movers are targeting less expensive and less competitive metros. Mortgage rates easing down has helped some, but the key to improving affordability long term is to build more homes.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n A monthly mortgage payment on a typical U.S. home has nearly doubled since January 2020, up 96.4% to $2,188 (assuming a 10% down payment). Home values have risen 42.4% in that time, with the typical U.S. home now worth about $343,000. Mortgage rates ended January 2020 near 3.5%, keeping the cost of a home affordable for most households that could manage the down payment. At the time of this analysis, mortgage rates were about 6.6%.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n For a household making the median income, it would take almost 8.5 years before they would have enough saved to put 10% down on a typical U.S. home, about a year longer than it would have in 2020. It\u2019s no wonder, then, tha thalf of first-time buyers say at least part of their down payment came from a gift or loan from family or friends.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n With the cost of a mortgage rising, most millennial and Gen Z buyers say \u201chouse hacking\u201d \u2013 the ability to rent out all or part of a home for extra cash \u2013 is very or extremely important. Co-buying with a friend or relative is another way to help with affordability, something 21% of last year\u2019s buyers reported doing.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Metro areas where a buyer could comfortably afford a typical home with the lowest income are Pittsburgh ($58,232 income needed to afford a home), Memphis ($69,976), Cleveland ($70,810), New Orleans ($74,048) and Birmingham ($74,338). The only major metros where a typical home is affordable to a household making the median income are Pittsburgh, St. Louis and Detroit.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n There are seven markets among the major metros where a household\u2019s income must be $200,000 or more to comfortably afford a typical home. The top four are in California: San Jose ($454,296), San Francisco ($339,864), Los Angeles ($279,250) and San Diego ($273,613). Seattle ($213,984), the New York City metro area ($213,615) and Boston ($205,253) complete the list.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Copyright \u00a9 2024 BridgeTower Media;<\/span><\/span><\/span><\/span><\/span><\/span><\/span>\u00a0Copyright, 2024, The Mecklenburg Times (Charlotte, NC).\u00a0All rghts reserved.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/div><\/div>\n <\/p>\n <\/p>\n