IYR - New Homes Remain Out Of Reach For Most American Households

2024-06-06 07:30:00 ET

Summary

• The initial estimate of the median sale price for a new home in April 2024 is $433,500.
• With an estimated median household income of $77,760, the monthly mortgage payment for a new home would consume 44.5% of the income earned by a typical American household.
• We anticipate the relative affordability of new homes in May 2024 will be similar to what it has been in recent months, which is to say that most American households will continue to not be able to afford to buy a new home anytime soon.

One hundred years ago, it was possible to buy a newly built home for $6,000 . With conventional mortgage rates averaging about six percent during the 1920s, it would only have taken an annual income of $1,540 to afford the monthly mortgage payment for such a home. Well over half the Americans who filed income tax returns that year could easily afford to buy that new home....

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