As home prices continue to rise more quickly than salaries, housing affordability is narrowing. According to the National Association of REALTORS® (NAR), median household income increased by 4.5% from Dec. 2020 to Dec. 2021, but monthly mortgage payments increased by 22.5%.

In the coming months, the potential of increased mortgage rates might offer another obstacle to home affordability.

According to NAR’s latest quarterly housing report, the average monthly mortgage payment on an existing single family home increased to $1,240 in the fourth quarter, based on a median home value of $361,700, a 20% down payment and a 3.13% 30-year fixed-rate mortgage. In comparison to a year earlier, this is a $201 increase.

According to NAR data, mortgage payments now account for 16.9% of a family’s household income, up from 14.7% a year earlier.

The good thing is that when more houses come on the market later in 2022, home prices should begin to stabilize.

Where do families need to earn the most money? A family required more than $100,000 in 20 regions to finance a 10% down payment on a home. The median house sale price in these areas varied from $537,400 to $1.675 million. The following are some of the most expensive metro areas to live in:

• Anaheim-Santa Ana-Irvine, California
• Los Angeles-Long Beach-Glendale, California
• San Diego-Carlsbad, California
• San Francisco-Oakland-Hayward, California
• San Jose-Sunnyvale-Santa Clara, California
• Boulder, Denver-Aurora-Lakewood, Fort Collins, Colorado
• Bridgeport-Stamford-Norwalk, Connecticut
• Naples-Immokalee-Marco Island, Florida
• Urban Honolulu, Hawaii
• Barnstable Town, Boston-Cambridge-Newton, Massachusetts-New Hampshire
• Reno, Nevada
• Nassau County-Suffolk County, New York
• New York-Jersey City-White Plains, New York-New Jersey
• New York-Newark-Jersey City, New York-New Jersey
• Portland-Vancouver-Hillsboro, Oregon
• Seattle-Tacoma-Bellevue, Washington
• Washington, D.C.-Arlington-Alexandria, Washington, D.C.-Virginia

 

Where do families need to earn the least money? There are still pockets of housing affordability. Across 81 markets a family could buy a home for less than $50,000. NAR identified metro regions in which the median house sale value was below $160,000 and a family required under $30,000 to buy a home. According to NAR, some of these markets include:

• Decatur, Peoria, Davenport-Moline-Rock Island, Illinois-Iowa
• Waterloo-Cedar Falls, Springfield, Rockford, Illinois-Iowa
• Cumberland, Maryland-West Virginia
• Binghamton, Elmira, New York
• Youngstown-Warren-Boardman, Toledo, Erie, Ohio-Pennsylvania