Clever Study Reveals Skyrocketing House Prices and Mortgage Rates Leave Many Americans Struggling to Afford Homes, With Only Six Major Cities Still Considered “Affordable” for Median Earners

Real estate company Clever has analyzed median housing and income figures across 50 major metropolitan areas, finding that the average first-time buyer needs an annual salary of $119,769 to comfortably afford a typical home in 2024. This figure represents a significant jump from current averages, with many American households falling far short when it comes to affording property – especially following last year’s surge in house prices driven by low mortgage rates and the pandemic-induced shift towards remote working. Clever’s analysis assumes that buyers will put down 10% on a home purchase (rather than the often recommended 20%) with an interest rate of 7.22%. This figure is higher than many experts predict for next year, but still lower than pre-pandemic averages as the Federal Reserve tries to quell rising inflation rates through aggressive monetary policy tightening measures. The study also found that only six major metropolitan areas are affordable for median earners when a 20% down payment is required – with Pittsburgh emerging as the most cost-effective location in which to buy property, followed by Cincinnati and Cleveland. In contrast, Californians looking to get on the housing ladder will face some of the toughest challenges thanks to soaring home prices and interest rates, according to Clever’s findings – with Los Angeles residents needing an annual income exceeding $249,000 just to comfortably afford a median-priced property in that area. Across California as whole, would-be buyers will need earnings of around $222,132 per year to secure their dream home based on the current housing market – far outstripping typical household income levels which currently stand at roughly $91,500 according to official figures released by the US Census Bureau. Based on Clever’s analysis, if mortgage rates were to drop back down towards 2.5% (as they did during much of last year), then first-time buyers would be able to afford homes costing around $300,000 – illustrating just how big an impact rising interest rate levels are having on the housing market and making it increasingly difficult for many Americans to get a foot onto the property ladder. However, experts have warned against delaying home purchases in anticipation of lower mortgage rates as house prices continue to rise at above-average annual growth rates – meaning that waiting too long could result in missing out altogether or facing much higher costs further down the line.