The income of a typical homebuyer in the United States surged to $107,000 from $88,000 last year, as home affordability precipitously worsened, according to an annual report from the National Association of Realtors.
The 22% jump was the highest annual increase on record, and puts homeownership out of reach for many families in the United States, where the median income is about $75,000, according to the Census Bureau.
“The household income for those who successfully purchased homes jumped by nearly $20,000 and topped six figures for only the second time in our records,” said Jessica Lautz, NAR deputy chief economist and vice president of research.
As a result, buyers’ typical downpayments jumped to the highest share of home purchase price in two decades — 8% for first time homebuyers and 19% for repeat buyers — as buyers pulled together larger downpayments to break through competitive bidding wars or to lower the amount of the purchase that was financed with a mortgage.
“In a still-competitive housing market, more well-off home buyers were able to have their bids accepted by offering larger down payments and even by paying cash,” said Lautz.
The annual survey of recent home buyers and sellers, which this year tracks transactions between July 2022 and June 2023, has been conducted since 1981.
Who is buying a home
The makeup of the households able to buy homes continues to shift, according to the report. Families facing higher costs because they have children are getting pushed further out of the homebuying picture.
An overwhelming 70% of recent buyers did not have a child under the age of 18 in the home, which was the highest share recorded in this study. By comparison, in 1985, only 42% of households did not have a child under the age of 18.
The share of married couples dropped to 59% percent of recent buyers — the lowest share since 2010 — while the share of single female buyers and single male buyers increased to 19% and 10% respectively. About 9% of buyers were unmarried couples.
Homebuyers became more diverse this year, with the share of white homebuyers dropping to 81% from 88% last year. Of recent homebuyers, 7% were Latino, 7% were Black, 6% were Asian or Pacific Islander and 6% identified as some other race. In addition, 38% of first-time home buyers identified as non-White or Caucasian, compared to 17% of repeat buyers.
“Homebuyers in the past year were more diverse, both racially and ethnically, with increases noted among minority buyers, buyers who were born outside of the US and buyers whose primary language is not English,” said Lautz.
The shift is an encouraging move toward closing the homeownership gaps that exist between white homeowners and other groups.
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