Published on Monday, May 6, 2024
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On the brighter side, the report said affordable inventory is on the rise in other parts of the country, especially the South
Once again, the national median income needed to buy a house has headed in the wrong direction – up. The median in April climbed to $116,000 --$5,900 more than was needed in April 2023. The price includes the cost of tax and insurance.
The median listing price rose from $424,900 in March 2024 to $430,000 in April, the same as in April 2023. According to a Realtor.com report, there were 30.4% more active listings this April than last, with a 12.1% increase in new listings. Houses stayed on the market 47 days, one more day than last year, and there was a 3.2 percentage point boost in the share of active listings with price reductions.
The report singles out California as a state where all the different dynamics at work in the national housing market are playing out.
"In areas like San Francisco home prices have fallen enough to offset rising mortgage rates, and the income needed to buy a home has dropped. In other markets, like San Jose and Sacramento, home price declines have been more modest and rising mortgage rates have pushed required incomes higher despite lower home prices,” said Danielle Hale, Realtor.com’s Chief Economist. “And finally, the majority of major U.S. markets see trends like we're seeing in Southern California. In Los Angeles, Riverside, and San Diego rising home prices and mortgage rates have combined to push required incomes higher.”
Indeed, in four California cities the income barriers to homebuying are extraordinary. The household income needed to buy a house in San Jose is $361,000, in Los Angeles $298,000, in San Diego $259,000 and in San Francisco $256,000. Two East Coast cities are also in the mix: Boston at $226,000 and New York at $218,000.
On the brighter side, the report said affordable inventory is on the rise in other parts of the country, especially the South, which accounts for 56.6% of available inventory and where more homes are now available in the $200,000 to $350,000 price range. The share of nationwide existing home sales in the South is 45.3%.
Active inventory has also risen in other parts of the country: 43% in the South, 27.4% in the West, 17.6% in the Midwest, and 4% in the Northeast. The number of homes for sale in Florida has also climbed, mostly due to more attached homes (condos, townhomes, row homes) on the market. In four metros, however, the number of active listings fell year-over-year: Cleveland (down 2.4%), Las Vegas (down 18.3%), New York (down 1.2%) and Rochester, NY (down 1.2%).
Although the national median list price remained stable, it rose 3.8% on an adjusted per-square-foot basis, indicating, the report said, “that homes are retaining value even as inventory grows.”
So where can would-be homebuyers turn if their household income has not reached the stratosphere?
The report identified 10 cities where income in the $67,000 to $90,000 range could qualify. They are Pittsburgh, Detroit, Cleveland, Birmingham, Buffalo, St. Louis, Rochester, Indianapolis, Louisville, and New Orleans.