Higher wages required to buy a home in Northwest Arkansas
Northwest Arkansans have to earn 48.3% more than a year ago to afford the region's median-value home, per the latest analysis by real estate company Redfin.
The big picture: The income needed to afford a home has soared as limited inventory and strong demand have driven up sale prices, and surging mortgage rates have made home loans more expensive.
Why it matters: Wages and salaries are not increasing at that pace, further constricting entry into the housing market for many people.
By the numbers: In March 2021, a hopeful homebuyer had to earn at least $40,463 to afford the median home for sale in the Northwest Arkansas metro area, Redfin found.
- This March, that figure jumped to $59,992.
- For a median sales price home of $324,000, a monthly mortgage with 5% down jumped from $1,012 to $1,500, per Redfin.
- Of note: A monthly mortgage payment is considered affordable if a homebuyer spends no more than 30% of their income on housing.
Meanwhile, wages grew 5% nationwide over the same period, according to the Bureau of Labor and Statistics.
- The median household income in the NWA metro is $61,761, according to newly released census data for 2016-2020.
Zoom out: Across the U.S., buyers need 34% more income to afford a home, Redfin found.
What they're saying: "Housing is significantly less affordable than it was a year ago because the surge in housing costs has far outpaced the increase in wages, meaning many Americans are now priced out of homeownership," said Redfin deputy chief economist Taylor Marr.
More NW Arkansas stories
No stories could be found
Get a free daily digest of the most important news in your backyard with Axios NW Arkansas.