A new analysis by economists at Zillow say the income a Greater Hartford homebuyer needs to afford the median home in the region rose by over $52,000 over the last four years.
Assuming a 10 percent down payment, the typical family buying a house would need to make $114,109 per year to afford the $2,136 monthly mortgage payment on the median-priced house, which Zillow estimated at $334,712.
That’s up $52,114 from January 2020. Furthermore, to assemble that 10 percent down payment, Zillow estimated a family earning the Greater Hartford median income would have to save for 7.3 years.
California’s Silicon Valley, San Francisco, Los Angeles, San Diego, Seattle New York City and Boston led the nation in worst affordability, leaving the Hartford area in the middle of the pack.
Nationally, the monthly mortgage payment on a typical U.S. home has nearly doubled since January 2020, up 96.4 percent to $2,188 (assuming a 10 percent down payment). Home values have risen 42.4 percent in that time, with the typical U.S. home now worth about $343,000.
“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,” said Orphe Divounguy, a senior economist at Zillow. “Buyers are getting creative to make a purchase pencil out, and long-distance movers are targeting less expensive and less competitive metros. Mortgage rates easing down has helped some, but the key to improving affordability long term is to build more homes.”
To make tough financing numbers like these work in today’s near-7 percent mortgage interest rate environment, 1 in 5 buyers told a separate Zillow survey last year that they bought their home in partnership with either a friend or relative.