Jeff Sibbach was featured and interviewed by AZ Family about the current real estate market. CLICK HERE to watch Jeff share his insight into why a new study says a 6-figure income is needed to buy a home in Arizona.
How Much Do You Need to Make to Own a Home?
From AZFamily – You will need a six-figure income if you want to buy a house in Arizona and 21 other states, according to a study by Bankrate.
Just four years ago, only Washington, D.C., California, Hawaii, Massachusetts, New York, New Jersey and Washington state required a six-figure salary to afford a typical home.
“Affordability is the biggest issue, finding a home that’s in your budget. The higher the price of a home, the harder it is to come up with the down payment or to qualify for the monthly payment. Home values are near record highs, and if you want a house, you have little choice but to pay a high price,” said Jeff Ostrowski, a Bankrate housing market analyst.
To afford a median-priced home of $402,343, Americans need an annual income of $110,871, up 46% since the start of 2020. Home buyers must earn at least $100,000 annually to afford a medium-priced home in 22 states and Washington, D.C., according to the study.
Analysts assessed affordability as whether mortgage payments could be made, assuming a 20% down payment with a 30-year-fixed rate. They did not factor in closing costs, home maintenance costs and non-housing item costs, which all home buyers have to take into consideration.
In Arizona, you’ll need to make $110,271, up 65.3% from the beginning of 2020, when $66,712 was enough for a median-priced home.
The places that need the highest household income to afford a typical home are California, Hawaii, Washington, D.C., Massachusetts and Washington state, where home buyers must earn between $156,814 and $197,057. Mississippi, Ohio, Arkansas, Indiana and Kentucky require the lowest levels of income, where home buyers must earn between $63,043 and $65,186.
The study says that part of the reason buying a home has become expensive is because wages have not kept up with the cost of homes and that 20% of aspiring homeowners think they will never save enough to be able to buy one.
“It’s frustrating for people because I think that they’ve dreamed their entire lives of buying a starting home in their late twenties or early thirties, and now it’s just unachievable,” said Jeff Sibbach.
Sibbach has been a realtor for more than 20 years.
“It’s the people that are moving here from Washington and Oregon and Colorado and Chicago or Illinois area is because of our sunshine. It’s drawing more and more people here, and it’s creating a demand,” he said.
Nancy Marion, Executive Director of Community Housing Partnership, says the Valley’s biggest problem in terms of affordable housing is not having enough inventory available for people who need it.
“Affordable housing really is the safety net between safe housing and homelessness,” said Marion.
Sibbach says high interest rates, more people moving to the area, and more homes being flipped for a profit are playing a part in what we are seeing. Still, he believes the market will eventually fix itself and preaches patience to anyone looking to buy a home right now.
“We’re kind of priced out at too many people’s range to keep it at this pace,” he said.
