Despite the improving economy since last year, the stagnant income is still one of the reasons why some Americans find it hard to own a home.
According to the a report released by Interest.com, a median income household can only afford a median priced home in 10 of the 25 biggest metropolitan areas in the United States. However, this is actually an improvement from last year’s 8 out of 25 metros.
The biggest leap over the past year was Baltimore from being ranked 17th in 2013 and 6th in 2014. On the other hand, Sacramento had the largest decline in a year’s time from ranking 12th to 18th.
Overall, the median home prices increased 6% since 2013 in 25 metropolitan areas while income only improved by approximately 2%. Contrary to what was expected, mortgage rates became actually better, which are homeowners are thankful for.
“Low mortgage rates are helping home affordability to some extent, but the key ingredient – which has been missing to this point – is substantial income growth,” Interest.com Managing Director Mike Sante said. “Millennials, in particular, are struggling to overcome their student loans and save enough money for a down payment.”