A homebuyer now needs to earn at least $114,000 a year to afford a $431,250 home – the national median listing price in April, according to data released Thursday by Realtor.com
The analysis assumes that a homebuyer will make a 20% down payment, finance the rest of the purchase with a 30-year fixed-rate mortgage, and that the buyer’s housing costs won’t exceed 30% of their gross monthly income — an often-used barometer of housing affordability.
Based off the latest U.S. median home listing price, homebuyers need to earn $47,000 more a year to afford a home than they would have just six years ago. Back then, the median U.S. home listing price was $314,950, and the average rate on a 30-year mortgage hovered around 4.1%. This week, the rate averaged 6.76%.
Not all land is created equal. You can buy some land in rural Nebraska right now and build your own modest house for less than $100k. You’d just have to commute an hour to get to the nearest dollar store.
Allowing more multifamily housing allows people to live affordably while simultaneously being somewhere they actually want to live, without having all their utilities and services subsidized by the government (ie, subsidized by people and businesses which exist in efficient and non-parasitic forms of development).
And yes, a big problem is that many americans’ life savings is tied up in their home value. Hence, liberalization of zoning codes and an implementation of a new taxation scheme must be done such that the vast majority of home owners don’t lose huge amounts of wealth and don’t have their lives significantly disrupted. This is very doable in any number of ways.
Under a Georgists tax scheme, government revenue would likely increase.