Detroiters need to make more money to buy a home
Residents of metro Detroit have to earn 21.3% more than a year ago to afford a median-value home.
Why it matters: The income needed to afford a home has increased as mortgage rates make borrowing more expensive and limited supply keeps pushing home prices steadily upward.
- But metro Detroit incomes are not increasing at that pace, further constricting purchasing power in the Southeast Michigan housing market for most people.
By the numbers: In March 2021, you had to earn at least $25,330 to afford the median home for sale in the Detroit metro area, per the latest analysis by real estate company Redfin.
- Now you need to bring in $30,737.
- For a median sales price home of $166,000, a monthly mortgage with 5% down jumped from $633 to $768.
Of note: A monthly mortgage payment is considered affordable if the homebuyer spends no more than 30% of their income on housing.
Meanwhile, wages in metro Detroit grew 4.6% over the same period, according to the Bureau of Labor and Statistics.
- Median pre-tax income in metro Detroit in 2021 was $57,000, per a recent Zillow study.
Zoom out: Across the U.S., buyers need 34% more income this year to afford a home, Redfin found.
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