(NewsNation) — The median household income of a typical homebuyer jumped to $107,000 from $88,000, according to the National Association of Realtors.
The 2023 Profile of Home Buyers and Sellers highlights how rising home prices and mortgage rates as a byproduct of inflation have led to the further erosion of home affordability in the United States. The report covers home sales from July 2022 to June 2023.
“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,” Jessica Lautz, NAR deputy chief economist and vice president of research, said in a news release.
Consumers have been been getting squeezed by inflation, which hit a four-decade high last year at more than 9%. It’s since receded and was sitting at 3.2% in October.
The Federal Reserve began hiking interest rates in an effort to bring down inflation. As a result, the average 30-year mortgage rate was at 7.4% Tuesday, according to CNBC, down slightly from 8% in October.
According to the NAR report, first-time homebuyers made up 32% of all buyers, up from last year’s historic low of 26%. It was still below the annual average of 38% since 1981.
“First-time buyers tiptoed back into the market this year with less competition and fewer multiple-offer scenarios,” Lautz said. “While the share of first-time buyers is still near historic lows, it is higher than last year. Notably, today’s first-time buyers had household incomes nearly $25,000 above last year and are more likely to use financial assets to enter the market.”
Buyers are increasingly being priced out of homes, and it’s never been more expensive to own than rent.
The typical monthly new mortgage payment is now 52% higher than the average apartment rent, the Wall Street Journal reported, citing a CBRE analysis.
That’s the widest cost gap between owning and renting since at least 1996, the Journal found.
The disparity has grown since the first quarter of 2022, when the premium for buying a home shot up to 20%, up from -1% just one quarter prior.
NewsNation digital reporter Andrew Dorn contributed to this report.