Being a former newspaper publisher, I developed a habit years ago of waking up early every morning and reading the major headlines across multiple mainstream news publications before heading to the office. This way, by the time I got to work I had time to think about any connections that national stories might have to local issues.
The other day, I read a statistic from a mainstream publication that I had to double-check to make sure it wasn’t from The Onion. The nationwide average income required to comfortably afford a typical US home is now $106,500 per year. Just four years ago, the average income needed to comfortably afford the same home was $59,000.
I was shocked. Stunned. The stat doesn’t seem real but was verified by Zillow. In four years, the average American family needed to increase their income by $47,500 to afford a typical American home. If your income has gone up that much in just a few years, feel free to reach out and let’s have lunch.
Homeownership is generally considered affordable if housing costs, including mortgage payments, do not exceed 30% of pre-tax income. However, with mortgage rates at around 6.6%, this benchmark is becoming increasingly out of reach for many. In 2020, the median U.S. income was about $66,000, making homeownership feasible for over half of American households. Now, with the required income level well into six-figure territory, a significant majority of Americans are priced out of the housing market entirely.
For many Americans, renting isn’t much better. The “Out of Reach” report from the National Low Income Housing Coalition says that Georgians earning the minimum wage must work 3.5 full-time jobs (or 140 hours per week) to rent a two-bedroom apartment. These numbers matter because someone earning double the federal minimum wage would still be required to work two full-time jobs the afford the median apartment. The sad result of this is that more Americans are working two or more full-time jobs than ever before.
Homeownership remains one of the most significant purchases for any household, offering a pathway to building wealth over time as property values appreciate. However, the soaring housing costs over the past four years—marked by drastic hikes in home prices, mortgage rates, and rent—have outpaced wage gains. As noted by Orphe Divounguy, a senior economist at Zillow, these high costs are driving Americans to seek more affordable housing options across the country. Currently, the typical U.S. home is valued at about $344,000. Yikes!
Divounguy suggests that the solution to this affordability crisis lies in increasing the housing supply. While easing mortgage rates have offered some relief, the long-term improvement in affordability hinges on building more homes.
For ALICE families in Central Georgia, the impact is deeply felt. While some cities like Pittsburgh offer more affordable homeownership opportunities, where an income of about $58,200 suffices, the reality is different in Central Georgia. Many local families are grappling with the financial strain of homeownership, seeking alternatives like “house hacking”—owning a home and renting out part of it to cover costs. Additionally, financial assistance from family or friends has become a crucial support for many first-time buyers.
As we navigate these challenging times, it’s essential to continue advocating for more affordable housing solutions and support our ALICE families in their quest for homeownership in Central Georgia. The road ahead may be tough,
but with community effort and strategic planning, we can work towards a more affordable and sustainable future for all.
With heartfelt gratitude,
George McCanless
President & CEO
United Way or Central Georgia
