The average monthly mortgage payment for a median-priced home is now $1,000 greater than the average rent payment, up from $280 pre-pandemic, write Marcus & Millichap researchers in an August brief on housing affordability.
As a result of this "affordability gap," the report notes, the estimated minimum annual income needed to afford a house in the U.S. surpassed $120,000 in June, a threshold that more than 73% of households cannot afford.
Despite effective rental rates growing nearly 17% in Q2 2022, apartments remain "a markedly less-costly option than home ownership."
"Given that the minimum annual income needed to buy a home is now well above $100,000, doubling in a span of just six years, a sizable portion of millennials will rent longer than past generations. It is increasingly likely that Gen Z will follow suit. These circumstances reinforce the imperative need for historic levels of multifamily development to help relieve excess demand."
Download the full report at MarcusMillichap.com.
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