It Takes $115,000 To Afford a House

A couple standing in front of a "Sold" sign holding the keys to their new house to represent the hidden cost of buying a home.Photo byMonkey Business Images via Shutterstock

A new study from real estate giant Redfin says it takes an annual salary of $115,000 to afford a house in the US.

With average salaries floating around $62,000 per year and medium household incomes at $75,000 per year, home ownership is out of reach for the vast majority of Americans.

Buying a House

The Redfin study showed that houses are about 15% more expensive than last year and up over 50% since the start of the pandemic three years ago.

The average mortgage payment is at an all-time high of $2866, up 20% from last year.

Salaries Not Keeping Up

Inflation on housing would be manageable if salaries kept up, but they’re not. According to the Social Security Administration, the average national salary in 2022 was $61,220, meaning a single person is unlikely to afford a home on their own.

It's out of reach even for couples, with the median household income $40,000 less than needed to afford a home.

Internet Reacts

A user posted the study on the popular antiwork subreddit, a community where people discuss the merits of employment versus living a good life and ridicule America’s toxic work culture.

Users already feel inflation’s tightening grip on everything from food to housing, so they weren’t unaware of the outrageous cost of living, but the high annual salary needed to buy a home helped put the real cost into perspective.

Landlords Need to Reign In

Some said landlords need tighter regulations. Homeownership isn’t the only housing situation moving out of reach. Renting a decent apartment in any major city is nearly impossible for low-wage workers.

Landlords only see dollar signs when they raise their rents to keep up with “market values” and don’t care that most people can’t afford these hefty new sums.

Some Landlords Don’t Have a Choice

The antiwork users often don’t consider the rising costs for landlords. When property values rise, taxes rise with them. So do the costs of maintenance and repairs.

Some landlords have to raise prices to break even.

Short Term Rentals

Others blamed the boom in short-term rentals like Airbnb. Thousands of investors swooped in to buy affordable housing, only to convert the units into short-term rentals. It had the bonus effect of limiting the affordable housing supply and increasing prices across the board.

Many municipalities worldwide are attempting to limit out-of-city investors from buying up all their property to ensure access to housing for their citizens, but the investor class constantly pushes back on all these policies.

Can’t Fathom Making That Much

Users in traditionally lower-cost-of-living areas see the same wild increases in their housing costs but don’t see wage increases to match.

One user said they make $40k per year, an above-average salary for their area, but still can’t fathom ever affording a home.

It’s Still Paycheck to Paycheck

Another user pointed out that someone making the low end ($115,000) would still live paycheck to paycheck if they bought a home.

“A house in my area is $3100 a month average WITH a 20% down payment,” they said. “That leaves $1,700 for bills, food, savings, car, life.”

$1700 a month after paying for housing is enough to survive but not enough to thrive. After paying for food, utilities, insurance, and transportation, there will be little left for savings or any “luxury” spending, like a night out or a cup of coffee.

The Situation Must Change

The current financial climate is untenable. People can’t afford life.

We need a massive paradigm shift so we start valuing the things that truly matter: humanity, community, and actualization over profits.

This article was produced and syndicated by Partners in Fire.