The Blubber

A new Zillow report found that the typical household needs to make over $106,000 a year to afford a home, assuming a 10% down payment and 30% of their income going toward housing costs.

This represents an 80% increase from January 2020, when the typical household needed to earn just $59,000 a year to comfortably afford a home. The surge in cost is due to higher home prices and increased borrowing costs.

Despite this, some buyers are still hopeful and are pursuing creative ways to purchase their first homes.

Homeownership is becoming increasingly unattainable
Zillow notes that the median U.S. household income in 2020 was around $66,000, which allowed more than half of households to afford a home at the time. The report estimates that a typical household today earns $81,000, based on data from Moody’s Analytics and the federal government.

However, the rising cost of homeownership has outpaced salary increases, with mortgage rates around 6.6% and the typical home now worth about $343,000, according to the digital real-estate platform.

“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates, and rent growth have far outpaced wage gains," said Orphe Divounguy, a senior economist at Zillow, in a press release.

"Buyers are getting creative to make a purchase feasible, and long-distance movers are targeting less expensive and less competitive metros.”