First-Time Homebuyers Face Steep Hurdles in Today's Market

Necessary annual income to afford a starter home almost doubles since pre-pandemic, reaching $75,849.

First-time homebuyers now require nearly double the income to afford a starter home compared to pre-pandemic levels, with a necessary annual income of around $75,849.
The increase in the income needed to purchase a starter home is attributed to higher mortgage rates and rising home prices, with the average starter home price now at $240,000.
Affordability is beginning to improve as mortgage rates start to decline from their peak, offering some relief to potential buyers.
The definition of a starter home has evolved, with what was once considered a starter home now potentially costing seven figures in expensive markets.
Income growth is not keeping pace with the increase in home prices, making it challenging for many first-time buyers to enter the market.