CHARLOTTE, N.C. — The income needed to "comfortably" afford a home in the U.S. has gone up 80% since 2020, according to analysis from real estate company Zillow.
The company recently released a report breaking down exactly how much money it takes to purchase a home and comfortably make that payment. Zillow defines comfortably as a household spending no more than 30% of its income with a 10% down payment.
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The average monthly mortgage has gone up 96.4% since January 2020 and home values have gone up 42.4%, with the typical U.S. home worth about $343,000. In Charlotte, the typical home is worth a little more, coming in at $368,000.
A household would need to earn approximately $106,000 annually to comfortably afford an average home, the analysis found. However, the cost of living is a little bit higher in Charlotte, where you'd need to make $111,000 a year to afford an average home.
Wages on the other hand, haven't kept up, only increasing by 23% during that same time period. Zillow researchers found that the average household income is an estimated $81,000, far below what's needed to comfortably afford the mortgage on a standard home. In 2020, a household earning $59,000 annually could comfortably afford the mortgage on a typical home.
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Rising prices have also made it much harder to save up for a new house. In Charlotte, a household that can comfortably afford a mortgage — again with $111,000 annual salary — would need to save 9.2 years to afford a 10% down payment on a home.
Real estate experts say there are a few ways you can get around expensive housing prices if you're willing to experiment. One of the new trends is called "house hacking," where buyers rent all or part of their home for extra cash. Many millennial and Gen Z buyer are also cobuying with a friend or relative to split the costs of homeownership. At least 21% of homebuyers in 2023 reported cobuying to save money on a new home, according to Zillow.
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