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Home buyers need to earn $47,000 more than in 2020

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The income needed to comfortably afford a home is up 80% since 2020, while median income has risen 23% in that time Home shoppers today need to make more than $106,000 to comfortably afford a home, a new Zillow® analysis finds. That is 80% more than in January 2020, showing how the math has changed for hopeful buyers, who are more often partnering with friends and family or “house hacking” their way to homeownership. In 2020, a household earning $59,000 annually could comfortably afford the monthly mortgage on a typical U.S. home, spending no more than 30% of its income with a 10% down payment. That was below the U.S. median income of about $66,000, meaning more than half of American households had the financial means to afford homeownership. Now, the roughly $106,500 needed to comfortably afford a typical home is well above what a typical U.S. household earns each year, estimated at about $81,000.1 “Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,” said Orphe Divounguy, a senior economist at Zillow. “Buyers are getting creative to make a purchase pencil out, and long-distance movers are targeting less expensive and less competitive metros. Mortgage rates easing down has helped some, but the key to improving affordability long term is to build more homes.” A monthly mortgage payment on a typical U.S. home has nearly doubled since January 2020, up 96.4% to $2,188 (assuming a 10% down payment). Home values have risen 42.4% in that time, with the typical U.S. home now worth about $343,000. Mortgage rates ended January 2020 near 3.5%, keeping the cost of a home affordable for most households that could manage the down payment. At the time of this analysis, mortgage rates were about 6.6%. For a household making the median income, it would take almost 8.5 years before they would have enough saved to put 10% down on a typical U.S. home, about a year longer than it would have in 2020.2 It’s no wonder, then, that half of first-time buyers say at least part of their down payment came from a gift or loan from family or friends. With the cost of a mortgage rising, most millennial and Gen Z buyers say “house hacking” — the ability to rent out all or part of a home for extra cash — is very or extremely important. Co-buying with a friend or relative is another way to help with affordability, something 21% of last year’s buyers reported doing. Metro areas where a buyer could comfortably afford a typical home with the lowest income are Pittsburgh ($58,232 income needed to afford a home), Memphis ($69,976), Cleveland ($70,810), New Orleans ($74,048) and Birmingham ($74,338). The only major metros where a typical home is affordable to a household making the median income are Pittsburgh, St. Louis and Detroit. There are seven markets among the major metros where a household’s income must be $200,000 or more to comfortably afford a typical home. The top four are in California: San Jose ($454,296), San Francisco ($339,864), Los Angeles ($279,250) and San Diego ($273,613). Seattle ($213,984), the New York City metro area ($213,615) and Boston ($205,253) complete the list. To help find a home within budget, home shoppers on Zillow can filter search results by monthly cost instead of by list price. The tool simplifies the complex calculation of translating a home’s list price into the monthly cost, factoring in the latest mortgage rates. MetropolitanArea* SizeRank Income Neededto Afford aMortgage,January 2024 Change inNeededIncome SinceJanuary 2020 Zillow HomeValue Index(ZHVI),January20243 MonthlyMortgagePayment,10% Down4 Years toSave a10%DownPayment Pittsburgh, PA 27 $58,232 $23,675 $201,487 $1,286 5.3 Memphis, TN 43 $69,976 $31,717 $230,807 $1,473 6.9 Cleveland, OH 34 $70,810 $30,227 $211,712 $1,351 6.0 New Orleans, LA 46 $74,048 $19,203 $232,870 $1,486 7.0 Birmingham, AL 50 $74,338 $31,875 $246,805 $1,575 6.7 Oklahoma City, OK 41 $74,732 $31,057 $226,048 $1,442 6.3 Detroit, MI 14 $75,662 $31,124 $236,025 $1,506 6.1 Buffalo, NY 49 $76,884 $34,744 $242,435 $1,547 6.5 St. Louis, MO 21 $76,895 $31,880 $238,231 $1,520 5.9 Louisville, KY 45 $77,450 $31,185 $243,810 $1,556 6.8 Indianapolis, IN 33 $82,037 $38,150 $267,301 $1,706 6.6 Cincinnati, OH 28 $86,027 $38,050 $267,423 $1,706 6.8 Kansas City, MO 31 $92,896 $40,742 $289,290 $1,846 7.2 Houston, TX 5 $95,374 $39,779 $300,955 $1,920 7.5 San Antonio, TX 24 $95,767 $38,307 $283,161 $1,807 7.5 Columbus, OH 32 $95,821 $43,405 $297,637 $1,899 7.3 Milwaukee, WI 40 $100,822 $42,613 $321,037 $2,049 8.5 Virginia Beach, VA 37 $102,703 $43,989 $332,820 $2,124 8.2 Chicago, IL 3 $104,757 $39,716 $300,906 $1,920 6.7 Richmond, VA 44 $106,170 $47,930 $349,558 $2,231 7.9 United States 0 $106,536 $47,490 $342,941 $2,188 8.4 Philadelphia, PA 7 $109,257 $47,837 $343,102 $2,189 7.5 Jacksonville, FL 39 $109,271 $51,617 $348,665 $2,225 8.2 Charlotte, NC 23 $111,051 $55,239 $368,712 $2,353 9.2 Hartford, CT 48 $114,109 $52,114 $334,712 $2,136 7.3 Minneapolis, MN 16 $114,344 $41,867 $355,511 $2,269 7.3 Baltimore, MD 20 $114,348 $44,063 $367,861 $2,347 7.6 Atlanta, GA 9 $115,430 $55,989 $370,548 $2,364 8.0 Tampa, FL 18 $116,329 $58,577 $370,474 $2,364 9.8 Las Vegas, NV 30 $119,529 $54,172 $407,516 $2,600 10.6 Dallas, TX 4 $121,398 $53,679 $366,690 $2,340 8.3 Orlando, FL 22 $121,418 $58,140 $386,687 $2,467 9.9 Nashville, TN 36 $128,535 $59,508 $425,827 $2,717 10.1 Raleigh, NC 42 $130,472 $62,410 $430,562 $2,747 8.7 Phoenix, AZ 11 $131,322 $65,017 $447,074 $2,853 9.9 Providence, RI 38 $142,928 $65,387 $449,025 $2,865 10.1 Austin, TX 29 $149,267 $65,144 $451,322 $2,880 8.8 Miami, FL 8 $151,163 $74,834 $472,970 $3,018 12.3 Salt Lake City, UT 47 $154,455 $72,592 $523,832 $3,343 10.6 Portland, OR 25 $161,624 $65,664 $528,724 $3,374 11.0 Washington, DC 6 $166,551 $64,078 $539,116 $3,440 8.2 Sacramento, CA 26 $172,261 $69,908 $559,243 $3,569 11.6 Denver, CO 19 $172,704 $71,338 $566,692 $3,616 10.7 Riverside, CA 13 $173,375 $81,676 $563,468 $3,595 12.6 Boston, MA 10 $205,253 $86,967 $650,890 $4,153 11.6 New York, NY 1 $213,615 $78,696 $627,944 $4,007 12.9 Seattle, WA 15 $213,984 $94,163 $697,824 $4,453 12.2 San Diego, CA 17 $273,613 $131,018 $902,199 $5,757 16.9 Los Angeles, CA 2 $279,250 $121,457 $918,247 $5,859 19.4 San Francisco, CA 12 $339,864 $119,614 $1,104,853 $7,050 16.0 San Jose, CA 35 $454,296 $191,071 $1,493,255 $9,528 18.8 *Table ordered by income needed to afford a mortgage in January 2024. 1 Median household income is taken from the American Community Survey (ACS) through 2022. Present-day estimates combine changes in the Employment Cost Index provided by the Bureau of Labor Statistics to forecast current median

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The Sellability Score uses machine learning to predict probability to sell in the next 90 days for almost every residential property in the United States Realeflow, a leading data and real estate investing software solution for real estate investors nationwide, announced the general availability of its 11th generation Sellability Score AI model for residential real estate investing. The Sellability Score uses machine learning and predictive analytics to uncover the earliest indicators that homeowners will soon list their properties for sale, and to predict the probability to sell in the next 90 days for almost every residential property in the United States. Early results of using the 11th generation Sellability Score include a nearly 20% lift in some markets. “The Sellability Score is an extremely sophisticated, but easy to use and understand, AI data solution for both new and experienced residential real estate investors, at a price point allowing access to insights formerly available only to top institutional investors,” said Realeflow founder and CEO Greg Clement. “Realeflow has been the AI leader in residential real estate investing since it first deployed AI in 2019, and it is the only major real estate data provider offering a sellability scoring dataset to help investors, buyers and agents use AI to find more and better leads.” Realeflow customers appreciate the Sellability Score AI, which helps them quickly find leads based on their criteria: The 11th generation Sellability Score references 136 billion data points over 40 years of real estate transactional data and a variety of demographic and socioeconomic datasets. It builds on the learning and understanding of the previous 10 generations of Sellability Scores with new variables and datasets, including lien data. The most significant changes in the 11th generation Sellability Score are that some influences occurring before the COVID-19 pandemic are now again impacting the model after the pandemic. For example: The benefits of the Sellability Score include: The 11th generation Sellability Score is embedded in the Leadpipes module of Realeflow’s Leadflow real estate investment software, available through Leadflow Invest and Leadflow Invest+ plans. The Sellability Score in action To use the Sellability Score, investors select Leadpipes Premium in the Leadflow software and enter parameters such as location, price and square-footage thresholds. Leadflow returns properties matching those parameters. The Sellability Score algorithm performs its calculations and returns three scores representing possible outcomes within 90 days for each property: Sellability scores range from zero to 1,000; the higher the score, the greater the chance the property will sell at retail or wholesale price within 90 days and be suitable as a rental property. After selecting their target properties, investors can perform their marketing with Leadflow by choosing the type and frequency of communications, such as mail, email, social media and phone, to contact the current owners or representatives. Leadflow can then automatically send written communications based on selected templates, or prompt users to call, and manage all subsequent activities leading to a transaction or other outcome. Realeflow was founded in 2006 in a highly competitive market and has operated through several different real estate and economic cycles. The company used its supreme industry experience, knowledge and understanding, combined with its leadership position in real estate data, to develop the 11th generation Sellability Score — making it as simple as possible for its customers to find great real estate investments. About Realeflow Realeflow is a leading data and real estate investing software solution for real estate investors nationwide. Founded in 2006, Realeflow provides real estate investors with a competitive advantage through its innovative and comprehensive technology platform and artificial intelligence solutions. Realeflow’s mission is to provide the tools necessary for real estate investors to achieve freedom in their lives. Realeflow helps its customers generate leads, analyze deals, make offers, fund deals, and rehab, sell and rent properties. Realeflow has helped more than 200,000 investors close more than $10 billion of real estate transactions.

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Leading the Build-to-Rent Revolution with Their Full-Service Approach for Investors SDIRA Wealth proudly announces its position as the number one full-service build-to-rent developer, revolutionizing the real estate investment landscape. With a commitment to innovation and investor-centric design, SDIRA Wealth is transforming the market with its unparalleled approach to new construction properties. Focused on catering to both renters and investors, SDIRA Wealth’s properties are meticulously crafted to meet the needs of both parties. By seamlessly blending tenant comfort with investor profitability, SDIRA Wealth sets the standard for excellence in the industry. “Our goal was to strategically develop properties in high-growth markets to meet the increasing demand from renters, all while remaining deliberate and attentive to the needs of our investors.” – Justin French, CEO of SDIRA Wealth For 23 years, having established a formidable presence in 15 states, SDIRA Wealth boasts an impressive track record, having sold over $2 billion worth of build-for-rent homes. This remarkable achievement underscores the company’s unrivaled expertise and dedication to delivering superior investment opportunities. With the volume of properties they build, they are able to offer pricing and bulk benefits that investors can’t find anywhere else, further solidifying their position as leaders in the industry. At the heart of SDIRA Wealth’s success are its investor-centric programs, designed to optimize returns and minimize tax liabilities. From cost segregation initiatives to 1031 exchange programs and self-directed IRA options, SDIRA Wealth offers a suite of customizable solutions tailored to each investor’s unique strategy. In the past year alone, the company’s tax-saving programs have resulted in over $22 million in savings for its clients. French, also a business strategist and former executive in the customer service industry, devised a process prioritizing investor needs and goals. “Our objective is to attentively listen and comprehend our clients’ needs. This approach is crucial as it enables us to tailor a strategy using our diverse markets, properties, and programs, resulting in a significantly enhanced experience compared to randomly selecting an investment property online. Each property we develop is part of one of our customizable programs, which our clients deeply appreciate.” SDIRA Wealth’s commitment to comprehensive service extends beyond investment opportunities. With a full-service model encompassing market research, property management vetting, and educational guidance from contract to post close, investors can trust SDIRA Wealth to support them at every stage of their journey. “We are thrilled to be recognized as the premier build-to-rent developer in the industry,” said French. “Our continued success is a testament to our unwavering commitment to our investors’ success and our relentless pursuit of innovation, giving investors the best possible experience.” For more information about SDIRA Wealth and its groundbreaking investment opportunities, visit www.sdirawealth.com. About SDIRA Wealth: SDIRA Wealth is a leading full-service build-to-rent developer, specializing in new construction properties designed for investors. With a presence in 15 states and over $2 billion in sold build-for-rent homes, SDIRA Wealth offers innovative investment opportunities and customizable programs to optimize investor returns. Website: www.sdirawealth.com

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Economic Growth Still Predicted to Soften as the Labor Market Shows Signs of Cooling Existing home sales and new single-family housing starts are expected to grow modestly in 2024 amid lower mortgage rates and slowly strengthening homebuyer sentiment, according to the February 2024 commentary from the Fannie Mae (OTCQB: FNMA) Economic and Strategic Research (ESR) Group. While housing affordability is still seriously constrained following the home price run-up of the past few years, the supply of existing homes available for sale is finally showing signs of loosening. Additionally, more households have recently signaled that they expect mortgage rates to decline, as evidenced by Fannie Mae’s January 2024 Home Purchase Sentiment Index®, a newfound optimism that may signal an increased openness to moving. The ESR Group’s latest forecast sees mortgage rates falling to 5.9 percent by the end of 2024 and 5.7 percent by the end of 2025, both slight upticks compared to last month’s forecast. Additionally, it expects single-family starts to trend upward in 2024 despite the pullback this past month, as permits have increased for twelve consecutive months and demand for new homes remains robust. The ESR Group upgraded its 2024 macroeconomic growth outlook due to a stronger-than-expected Q4 2023 gross domestic product (GDP) report, as well as incoming data on recent population growth and immigration trends that point to faster payroll and GDP growth over the forecast horizon. Still, the ESR Group continues to expect a slower pace of economic growth in 2024 compared to 2023. An unsustainably low savings rate suggests softer consumer spending going forward, consistent with the pullback in January retail sales, and slowing local and state tax receipts point to slower direct government spending growth. Further, while payroll growth looks to have reaccelerated in December and January, other labor market measures indicate softness, including the household survey and the quits rate. On net, this suggests to the ESR Group that the labor market is likely to cool in the near future. “Market dynamics continue to reflect significant uncertainty regarding the sustainability of stronger-than-expected recent GDP growth, the continuity of the decline of inflation, and the path of monetary policy change, not to mention the many ways in which historical relationships in housing and the larger economy remain out of balance post-pandemic,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Right now, our base case scenario foresees economic growth decelerating, rates gradually declining, and new single-family home sales slowly recovering as construction adds supply. However, if economic growth continues to surprise to the upside, then we believe the risk of mortgage rates remaining higher for longer will also increase.” Visit the Economic & Strategic Research site at fanniemae.com to read the full February 2024 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here. SOURCE Fannie Mae

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In January, U.S. median rents dropped (-0.3%) for sixth straight month Rents fell in January for the sixth month in a row, with year-over-year prices down -0.3%, according to the monthly Realtor.com® Rental Report . That’s providing some relief for renters, though prices remain higher than pre-pandemic levels amid strong demand and a limited supply of new units in many markets. In January, the median asking rent for 0-2 bedroom units in the 50 largest metros declined to $1,712, down $5 from the previous January and $46 below its August 2022 high. Following this trend, a recent Realtor.com® Avail Landlord & Renter Survey found that the percentage of landlords planning to raise rents in the next 12 months declined in recent quarters. Still, prices are 18.3% higher than they were four years ago. Median rents were mixed across unit sizes. Regionally, some big Western metro markets began to rebound while supply of new multifamily housing units outstripped demand in the South, pushing down prices. “Rental prices are declining, especially in places where new units are entering the market, but there’s still plenty of demand driven by the large population of renters, including potential first-time homebuyers who remain on the sidelines for now,” said Danielle Hale, Chief Economist at Realtor.com®. “Looking forward, Realtor.com® anticipates the rental market to decline only slightly in 2024, as an increase in the supply of new units is balanced out by continued enthusiasm for renting as a more affordable alternative to purchasing.” January 2024 Rental Metrics by Unit Size – National Unit Size Median Rent Rent YoY Rent Change – 4 years Overall $1,712 -0.3 % 18.3 % Studio $1,434 -1.0 % 11.9 % 1-bed $1,591 0.1 % 17.9 % 2-bed $1,892 -0.6 % 20.4 % Studios saw largest rent declinesThe median asking rent for studios fell by -1.0% to $1,434, which is down -3.8% from its October 2022 peak but still 11.9% higher than four years ago. Asking rents for two-bedroom units declined by -0.6% to $1,892. Those larger units still saw the highest growth in rent prices over the past four years, with an increase of $321 (20.4%). Meanwhile, asking rents for one-bedroom units rebounded after declining since July 2023, increasing by 0.1% year over year to $1,591 in January. Demand for one-bedroom units may be fueled by the perception that they’re a sweet spot in the market: more spacious than a studio and more affordable than a two-bedroom unit. Big Western Metros started to see reboundIn January 2024, the median rent in the West fell by -0.3% from a year ago, led by declines in areas including Phoenix (-4.0%), Riverside, Calif. (-2.6%) and Las Vegas (-1.8%). But rents rebounded in some big metros, with Los Angeles (0.2%) and Seattle (1.3%) showing year-over-year increases following eight straight months of decline. With home prices still high and mortgage rates expected to remain elevated in the short term, many first-time buyers are choosing instead to rent. Rents are rising faster in big Northeastern metros such as New York (2.3%) and Boston (2.7%), where labor markets are strong and there’s slow growth in new housing stock, putting upward pressure on rents. Rents grow in Midwest markets, drop in the SouthAsking rents in the Midwest rose by 0.2% in January, bolstered by markets such as Chicago (4.2%), Indianapolis (3.5%) and Kansas City, Mo. (3.1%). These markets are enjoying low unemployment, which stokes rental demand, and they remain affordable in comparison with other parts of the country. Chicago’s median rent of $1,852 is almost $1,000 less than big-city counterparts New York ($2,844) and Los Angeles ($2,829). Meanwhile, the median asking rent fell by 1.2% in the South, led by year-over-year declines in Memphis, Tenn. (-5.5%), Atlanta (-3.8%), Austin, Texas (-3.6%). St. Louis, Mo. (-3.6%) and Miami (-3.4%). Unemployment in the South is also low, but the supply of new multifamily housing is growing, pushing down rental prices. Rental Data – 50 Largest Metropolitan Areas – January 2024 Metro Median Rent (0-2 Bedrooms) YOY (0-2 Bedrooms) Atlanta-Sandy Springs-Roswell, GA $1,619 -3.8 % Austin-Round Rock, TX $1,547 -3.6 % Baltimore-Columbia-Towson, MD $1,790 -0.6 % Birmingham-Hoover, AL $1,245 -0.8 % Boston-Cambridge-Newton, MA-NH $2,981 2.7 % Buffalo-Cheektowaga-Niagara Falls, NY NA NA Charlotte-Concord-Gastonia, NC-SC $1,542 -0.1 % Chicago-Naperville-Elgin, IL-IN-WI $1,852 4.2 % Cincinnati, OH-KY-IN $1,318 1.4 % Cleveland-Elyria, OH $1,217 -2.0 % Columbus, OH $1,178 -2.5 % Dallas-Fort Worth-Arlington, TX $1,505 -1.0 % Denver-Aurora-Lakewood, CO $1,922 0.3 % Detroit-Warren-Dearborn, MI $1,308 -0.3 % Hartford-West Hartford-East Hartford, CT NA NA Houston-The Woodlands-Sugar Land, TX $1,394 2.8 % Indianapolis-Carmel-Anderson, IN $1,288 3.5 % Jacksonville, FL $1,534 -2.2 % Kansas City, MO-KS $1,318 3.1 % Las Vegas-Henderson-Paradise, NV $1,489 -1.8 % Los Angeles-Long Beach-Anaheim, CA $2,829 0.2 % Louisville/Jefferson County, KY-IN $1,234 2.7 % Memphis, TN-MS-AR $1,247 -5.5 % Miami-Fort Lauderdale-West Palm Beach, FL $2,373 -3.4 % Milwaukee-Waukesha-West Allis, WI $1,574 -0.9 % Minneapolis-St. Paul-Bloomington, MN-WI $1,491 -0.4 % Nashville-Davidson–Murfreesboro–Franklin, TN $1,613 -2.3 % New Orleans-Metairie, LA NA NA New York-Newark-Jersey City, NY-NJ-PA $2,844 2.3 % Oklahoma City, OK $988 2.2 % Orlando-Kissimmee-Sanford, FL $1,682 -1.9 % Philadelphia-Camden-Wilmington, PA-NJ-DE-MD $1,780 -2.0 % Phoenix-Mesa-Scottsdale, AZ $1,550 -4.0 % Pittsburgh, PA $1,421 1.1 % Portland-Vancouver-Hillsboro, OR-WA $1,656 -0.7 % Providence-Warwick, RI-MA NA NA Raleigh, NC $1,529 -1.5 % Richmond, VA $1,492 -0.1 % Riverside-San Bernardino-Ontario, CA $2,174 -2.6 % Rochester, NY NA NA Sacramento–Roseville–Arden-Arcade, CA $1,844 0.9 % San Antonio-New Braunfels, TX $1,275 1.0 % San Diego-Carlsbad, CA $2,811 1.1 % San Francisco-Oakland-Hayward, CA $2,837 -0.6 % San Jose-Sunnyvale-Santa Clara, CA $3,217 2.9 % Seattle-Tacoma-Bellevue, WA $2,012 1.3 % St. Louis, MO-IL $1,295 -3.6 % Tampa-St. Petersburg-Clearwater, FL $1,740 -1.1 % Virginia Beach-Norfolk-Newport News, VA-NC $1,508 -0.4 % Washington-Arlington-Alexandria,DC-VA-MD-WV $2,194 1.9 % SOURCE Realtor.com