LOS ANGELES - It's getting more and more unrealistic for the average American to afford a home.
In order for Americans to own that white picket fence in their dream neighborhood, they would need to earn over six figures in order to purchase a median-priced home, according to a report from Redfin, a corporation that specializes in all things in real estate.
A homebuyer would need to earn at least $114,627 to afford the median-priced home in the U.S., which is up by 15% from last year, Redfin reports.
More concerning for homebuyers is the fact that this amount is up more than 50% since before the COVID-19 pandemic.
In a separate report, GO Banking Rates ranked the most affordable states per home which can be viewed below:
The reality of unrealistic home prices is likely the cause of falling house sales in the country.
Sales of previously occupied U.S. homes fell in October for the ninth consecutive month to the slowest pre-pandemic sales pace in more than 10 years as homebuyers grappled with sharply higher mortgage rates, rising home prices and fewer properties on the market.
Existing home sales fell 5.9% last month from September to a seasonally adjusted annual rate of 4.43 million, the National Association of Realtors said Friday. The string of monthly sales declines this year is the longest on record going back to 1999, the NAR said.
Sales cratered 28.4% from October last year. Excluding the steep slowdown in sales that occurred in May 2020 near the start of the pandemic, sales are now at the slowest annual pace since December 2011, when the housing market was still mired in a deep slump following the foreclosure crisis of the late 2000s.
Despite the slowdown, home prices continued to climb last month, albeit at a slower pace than earlier this year. The national median home price rose 6.6% in October from a year earlier, to $379,100.
The median home price is down about 8% from its June peak, but remains 40% above October 2019, before the pandemic, said Lawrence Yun, the NAR’s chief economist.
"That’s really hurting affordability," he said. "Most household incomes have not risen by 40%."
The inventory of homes on the market declined for the third month in a row. Some 1.22 million homes were for sale by the end of October, down 0.8% from September, the NAR said.
That amounts to 3.3 months’ supply at the current pace. In a more balanced market between buyers and sellers, there is a 5- to 6-month supply.
The Associated Press contributed to this story.