The barrier to entry for homeownership is on the rise.
Starter homes are at the highest prices since 2008, Bloomberg reported. In the second quarter, first-time buyers needed nearly 23 percent of their income to afford a typical entry-level home — up from 21 percent a year earlier.
“When prices go up at the entry level, that’s where the affordability issue is most acute,” Charles Dougherty, a Wells Fargo economist, told Bloomberg. “People are hesitant to stretch the amount they’re willing to pay.”
The lower end of the market has faced a particular challenge with affordability, the report said. Prices have risen as supply tightens — and rising mortgages aren’t helping.
The most expensive markets are New York and San Francisco — where the median household needed to spend about 65 percent of its income to purchase a home. Those cities were followed by Los Angeles, at 59 percent, and Miami, at 55 percent.
Broadly, it’s getting more expensive to buy a house across the market. A previous report noted affordability fell to the lowest level since late 2008. In May, the median price of a previously owned homes rose to a record $264,800. [Bloomberg] — Meenal Vamburkar