Home ownership further out of reach as rising prices, high mortgage rates widen affordability gap

By ALEX VEIGA Associated Press Business Writer LOS ANGELES AP Home ownership is receding further out of reach for bulk Americans as elevated mortgage rates and rising prices stretch the limits of what buyers can afford A homebuyer now necessities to earn at least a year to afford a home the national median listing price in April according to content distributed Thursday by Realtor com The analysis assumes that a homebuyer will make a down payment finance the rest of the purchase with a -year fixed-rate mortgage and that the buyer s housing costs won t exceed 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 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 and the average rate on a -year mortgage hovered around This week the rate averaged FILE A sign announcing a home for sale is posted outside a home Thursday Feb in Aceworth Ga near Atlanta AP Photo Mike Stewart File The annual income required to afford a median-priced U S home first crossed into the six figures in May and hasn t dropped below that level since Median household income was about annually in according to the U S Census bureau In several metro areas including San Francisco Los Angeles New York and Boston the annual income needed to afford a median-priced home tops In San Jose it s more than Rock-bottom mortgage rates turbocharged the housing field during the pandemic fueling bidding wars for homes that pushed up sale prices sometimes hundreds of thousands of dollars above a seller initial asking price U S home prices soared more than between and The U S housing territory has been in a sales slump since when mortgage rates began to climb from their pandemic-era lows Sales of previously occupied U S homes fell last year to their lowest level in nearly years In March they posted their largest monthly drop since November Related Articles Stock industry in contemporary times Wall Street points toward gains as China considers US overtures on tariffs Employers added a surprising jobs as job realm shows resilience Unemployment stays at US robot makers hope to beat China in humanoid race Tariffs could affect their ambitions Hegseth orders Army to cut costs by merging specific commands and slashing jobs US wants to move Georgetown scholar s deportation lawsuit to Texas Judge appears skeptical It s not all bad news for prospective homebuyers Home prices are rising much more slowly than during the pandemic housing field frenzy The national median sales price of a previously occupied U S home rose in March from a year earlier to an all-time high for March but the smallest annual increase since August In April the median price of a home listed for sale rose only from a year earlier according to Realtor com Buyers who can afford current mortgage rates have a wider selection of properties now than a year ago Proceeding listings a tally that encompasses all homes on the domain except those pending a finalized sale surged last month from a year earlier according to Realtor com Home listings jumped between and in San Diego San Jose and Washington D C As properties take longer to sell more sellers are reducing their asking price A few of listings had their price reduced last month according to Realtor com Sellers are becoming more flexible on pricing underscored by the price reductions we re seeing and while higher mortgage rates are certainly weighing on demand the silver lining is that the sphere is starting to rebalance revealed Danielle Hale chief economist at Realtor com This could create opportunities for buyers who are prepared