Six-Figure Struggle

November 15, 2023

THE BIG SPLASH

Six-figure struggle

What you can’t miss today

In a twist of the American dream, most homebuyers now need a six-figure income to snag a house, as the median income of US homebuyers skyrockets to $107,000.

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  • First-time homebuyers are back in the game, making up 32% of all buyers, but they're packing heavier wallets.

  • The median income for these new homeowners has jumped a staggering 35% to $95,900.

  • Home prices? They hit a record high in June 2022, and mortgage rates are playing hopscotch over 7%.

  • The typical down payment for first-timers is the highest since 1997, at 8% of the purchase price.

  • To afford these homes, buyers are dipping into stocks, bonds, and retirement funds.

  • The dream of homeownership is becoming more of a fantasy, with 3 out of 4 renters thinking a home is out of reach.

A SCOOP OF MARKET DATA

The number you should know

567,000

The housing market is showing signs of life with a slight uptick in inventory and home sales as 2023 winds down, but don't break out the champagne just yet.

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  • There are 567,000 single-family homes on the market, unchanged from last week, hinting at a market that's as stuck as a door with swollen hinges.

  • With 66,000 new listings and 11,000 already under contract, it seems sellers are finally coming out of hiding.

  • There were 52,500 new contracts for single-family homes, slightly more than last year - a glimmer of hope in a market thirstier for good news than a desert for rain.

  • About 39.2% of homes have had price cuts, suggesting sellers are getting a reality check.

  • Home prices are stubbornly 1-2% above last year's levels, with the median price hovering just under $430,000 - because why make things affordable now?

A SCOOP OF INSIGHTS

Something you’ll learn

Las Vegas, Phoenix, and San Antonio are the new beacons of affordability for middle-class Americans seeking a cost-effective lifestyle.

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  • Las Vegas, the unexpected star, is luring folks with its surplus of homes and no income tax. It's the "new LA," or should we say "Las Fornia," according to one enthusiastic real estate agent.

  • Phoenix tops the charts as the number one relocation spot, attracting Californians and their wallets, inadvertently hiking up local home prices.

  • San Antonio, Texas, plays it cool as an affordable option, especially compared to its pricier Texan siblings like Austin.

  • Middle-class movers, defined as those earning between $45,000 and $145,000, are fleeing states with higher living costs and taxes.

  • The trend is reshaping these cities, with Las Vegas and Phoenix experiencing significant population growth, while Denver's allure seems to be fading.

  • The big draw? Lower housing costs and tax benefits, making these cities the new promised lands for budget-conscious house hunters.

A SCOOP OF CONTROVERSY

Everyone will talk about it

Baby boomers are now the ones snapping up houses, leaving younger generations in the dust.

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  • The median age for repeat home buyers has hit 58, a stark jump from 36 back in 1981.

  • First-time buyers, now typically in their mid-30s, are getting outbid by these cash-rich, older buyers.

  • The housing market remains unexpectedly robust, even with mortgage rates nearing 8%.

  • Older buyers often bring the allure of cash from selling their previous homes, making them more attractive to sellers.

  • The typical seller is now around 60 years old, adding to the trend of an aging buyer demographic.

  • This shift is creating a tight squeeze on housing inventory, especially for homes suitable for downsizing but not ready for assisted living.

  • The competition often leaves younger, first-time buyers struggling to find a foothold in the market

How was today's shake?

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