NAR said there has been a 25 percent increase in people out shopping for homes, but a decrease in the number of homes on the market is pressuring prices upward. In fact, they were up 12 percent from a year ago.
It’s just one month’s worth of data, and most experts are saying they see this as a pause before the big push into spring and summer for housing, but we couldn’t help but dig up a few numbers of our own to see where housing prices sit with income levels.
While interest rates are at all time lows, allowing people to maybe buy more house than they used to, we decided to compare what the median household income could afford for a home using a conservative, but established method, (the old you can afford a mortgage at 3-times your income) versus what the actual median sales prices are.
Here’s what we found.
Nationally, the median sales price for a home was $184,300. The national median income is about $50,443, which means the median family could afford up to buy a $188,189 home provided they have a 20 percent down payment.
In Connecticut, the median sales price for a home has been running around $240,000 while the median income is about $66,748. Which means the median family could buy a house priced at $248,244 if they have 20 percent to put down.
Both state and national sales prices are awfully close to that key income threshold that could come into play as people think about what they can afford and whether they want to take out a loan. But whether that’s playing into the market right now, or will, remains to be seen.