The Expert Podcast

• National Review Article: Discusses how a six-figure income is now required to buy a median home in the U.S.
• Breaking Down the Numbers:
  • Earning $100K/year, you may take home $75K-$80K after taxes.
  • A mortgage on a median-priced home (around $420K-$440K) could cost $4K-$4.5K/month.
  • This leaves very little for other expenses like gas, groceries, and car payments.
• Increase in Income Needed:
  • In 2022, homebuyers need to earn $107K to afford a median home—up from $73K in 2021.
  • That’s almost a 50% increase in the income needed to buy an average home.
• Impact on the Housing Market:
  • With fewer homes being sold due to affordability, volumes are expected to drop significantly.
  • However, home prices may not drop much at the national level due to supply and demand.
  • There’s a shortage of 3-5 million homes, and this gap is widening as more people enter the housing market.
  • Builders are hesitant to build new homes due to uncertain demand, worsening the problem.
• Long-Term Concerns:
  • Fewer homes are being built, and the impact of low new home production may worsen by 2025 or 2026.
  • Older homes, especially those built in the 80s and 90s, are designed to last only 40-50 years.
  • As these homes reach their expiration date, more will need to be rebuilt, further tightening the housing market.
• Conclusion:
  • A potential housing crash may not be realistic, despite some hoping for lower prices.
  • The housing market faces long-term challenges due to supply shortages and aging homes.