According to Redfin, 2023 has been the least affordable year for home purchases on record. Someone making the $78,642 median U.S. income would’ve had to spend 41.4 percent of their earnings on monthly housing costs if they bought the $408,806 median-priced U.S. home. That’s the highest share on record—up from 38.7 percent in 2022.
The typical 2023 homebuyer needed to earn an annual income of at least $109,868 if they wanted to spend no more than 30 percent of their earnings on monthly housing payments for the median-priced home. That’s a record high—up 8.5 percent from 2022—and is $31,226 more than the typical household makes in a year.
“The good news is that affordability is already improving heading into the new year,” said Redfin Senior Economist Elijah de la Campa. “Mortgage rates are coming down, more people are listing homes for sale, and there are still plenty of sidelined buyers ready to take a bite of the fresh inventory. We expect these conditions to continue to improve in 2024.”
The least affordable markets were Anaheim and San Francisco, where homebuyers with the typical local income would’ve needed to spend over 80 percent of their pay on monthly housing costs. Detroit and Pittsburgh were the most affordable.