Buying a home in Philly or Delco? You need to make more money than last year to afford it.
Among the 50 largest U.S. metropolitan areas, the market Redfin defines as Philadelphia and Delaware County had the second-biggest percentage increase in the income needed to afford the typical home.
Across the country, homebuyers needed to make slightly less money this April than last year to comfortably afford the typical home, according to a Redfin analysis of the 50 most populous U.S. metropolitan areas.
But in Philadelphia and Delaware County, buyers needed to make more. This market, as defined by Redfin, had the second-biggest percentage increase in the income needed to afford the typical home.
Buyers in this region needed to make $85,541 to comfortably afford the median-priced home for sale in April — an almost 6% increase from last year in income required. Households made a median of $75,254, about $10,000 less than needed.
The median sale price for a home was about $309,000 in April. In Philadelphia especially, households’ relatively low incomes drive unaffordability more than high home prices, although rising costs continue to make homes less affordable.
Redfin called a home affordable if a buyer with a mortgage who made a 15% down payment would spend no more than 30% of their income on their monthly housing payment. In Philadelphia and Delaware County, the typical homebuyer needed to spend 34% of their income.
Comparisons with other markets
Among major metros, only the San Francisco region had a larger percentage increase in the income households needed to afford a typical home — 7%. Homebuyers in this expensive West Coast market needed to make $443,979, the highest income required among the metro areas.
The income required to afford a home in the market that Redfin defines as Montgomery, Bucks, and Chester Counties stayed flat in April at about $142,000.
Compared to April of last year, homebuying got more affordable in 35 of the 50 major metros. In the Chicago area, the income needed to afford a home dropped more than 13%, which was the biggest decrease. Homebuyers still needed an annual income of $101,075.
In nine metro areas, the typical household made more than needed to afford the typical home in April. In the Pittsburgh region, households needed to make $73,411 but made a median of $83,419.
National drop in required income
Across the country, homebuyers needed to make $116,780 to afford the median-priced U.S. home for sale in April, down 2% from the same time last year.
More homes were on the market this April than last April, and that boost in housing supply is tamping down on prices, said Redfin economist Grishma Bhattarai.
“Americans still need a six-figure income to afford a regular home, but it’s encouraging that affordability is gradually improving,” Bhattarai said in a statement.
In April, 33% of U.S. home listings were affordable to a buyer with the median income of $87,599. That’s up from about 29% the same time last year.
But U.S. homebuyers still needed to spend 40% of their monthly income in April for the median-priced home, which cost about $396,000. That’s a higher share than the general affordability rule of spending no more than 30%. But it’s slightly lower than the more than 42% that U.S. homebuyers were spending last April.
