New Homebuyers Will Pay $80K More Than Pre-Pandemic — If They Can Find a House To Buy At All

andresr / iStock.com
andresr / iStock.com

If you’re worried about having to pay a lot more money for a house in 2022 than you did a couple of years ago, you can take heart in the fact that you might not find a house, anyway.

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Since 2019, average home prices in the United States have risen nearly 30%, meaning that a typical home is about $80,000 more expensive than it was before the COVID-19 pandemic, according to a new analysis from the National Association of Realtors and Realtor.com.

At the same time, the inventory of available homes has fallen dramatically, hitting record lows in 2021. There was a housing shortage even before the pandemic hit in 2020, and it has only worsened since then, as home builders have been handicapped by a labor shortage, higher material costs and supply chain disruptions.

These two trends — higher home prices and a lack of available homes — have made the housing market particularly treacherous for middle-income earners, the NAR said in a new report titled “The ‘Double Trouble’ of the Housing Market,” released this month.

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Researchers found that there are currently only about 1 million units available for sale in the U.S., compared to nearly 4 million homes 15 years ago. This has intensified the competition for homes, driving prices higher.

Using an analysis of mortgage rates, home prices and average wages, the NAR and Realtor.com learned the following:

  • A household earning $75,000 to $100,000 per year can afford to buy 51% of the current active housing inventory. That’s down from 58% in 2019, before the pandemic.

  • There is 57% less inventory now than in 2019. This means that potential buyers not only can afford fewer homes than they could before the pandemic, but they also have fewer available homes to choose from.

  • About 245,300 homes are currently listed for sale that a household earning $75,000 to $100,000 can afford to buy. This compares to 656,200 available homes for that same household before the pandemic. Using current numbers, there is only one listing available for every 65 households in the $75,000-$100,000 income group — well down from one listing for every 24 households in 2019.

The situation is even more challenging for households that earn $50,000 to $75,000 a year. Households in this income group can afford about 165,280 listings in 2022, down from 450,220 at the end of 2019.

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If you’re wondering where to find a home for sale in the right price range, the best markets for those earning $75,000 to $100,000 right now are Deltona, Florida; Des Moines, Iowa; Augusta, Georgia; Atlanta, Georgia; and McEllan, Texas.

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This article originally appeared on GOBankingRates.com: New Homebuyers Will Pay $80K More Than Pre-Pandemic — If They Can Find a House To Buy At All

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