The average homebuyer in the United States now needs a six-figure income
The typical U.S. homebuyer now needs more ready cash to purchase a home — as well as a six-figure income — according to a new report released Monday by the National Association of Realtors.
Median household income for homebuyers jumped 22% to $107,000 in June from $88,000 at the same time in 2022, according to the latest data, which the National Association of Realtors (NAR) has tracked since 1981.
“Given the erosion of housing affordability due to rising home prices and mortgage rates, household income for those who successfully purchased homes jumped by nearly $20,000 and exceeded six figures for only the second time in our records,” said Jessica Lautz, NAR’s deputy chief economist and vice president of research. . “In a still competitive housing market, more affluent homebuyers have been able to have their bids accepted by making larger down payments and even by paying cash.”
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Buyers certainly need more cash to make a deal. The typical down payment for a US buyer was 19% of the purchase price in June, the highest dollar amount since 2005, according to the report. For first-time buyers, the down payment was typically 8%, the highest since 1997.
The report said the number of first-time buyers rose to 32% of all homebuyers, compared to last year’s historic low of 26%. However, this number is still lower than the historical average of 38% since 1981. Additionally, the average age of first-time homebuyers has dropped from a record high of 36 to 35, while the age of repeat buyers has dropped from 59 Also general. Record number – to 58.
“First-time buyers have returned to the market this year with less competition and fewer multiple offer scenarios,” Lauts said. “Although the proportion of first-time buyers remains near historical lows, it is higher than last year. It is worth noting that today’s first-time buyers have household incomes nearly $25,000 higher than last year, and are more likely to use financial assets to enter market.
There was also more diversity in homebuyers, according to the report, which was based on a survey of primary residence homebuyers. The percentage of white buyers decreased from 88% to 81%, with 7% identifying as Hispanic; 7% in black; and 6% of Asian/Pacific Islanders. In addition, 10% of buyers were born outside the United States, up from 8% last year, and 6% speak a primary language other than English, up from 5% last year.
“Last year homebuyers were more diverse, both racially and ethnically, with increases seen among minority buyers, buyers born outside the United States and buyers whose primary language is not English,” Lautz said. “This shows encouraging signs that the homeownership rate may shrink in the future as more minority buyers enter the market.”