Last Year Homes Earned More for Homeowners Than Their Jobs
For the first time the Increase in value of the typical U.S. home exceeded the median worker income according to Zillow
In this crazy appreciating housing market, many homeowners earned more last year from home appreciation than they did from their jobs.
The typical U.S. home, rose 19.6% in 2021 to $321,634, an increase of $52,667 from 2020. According to Census Bureau data cited by Zillow That figure was slightly higher than what the median U.S. full-time worker earned, which was about $50,000 last year before taxes.
This marks the first time that the annual nationwide dollar growth for the typical home value exceeded the inflation-adjusted median pretax income.
We saw a huge surge in home values in 2021 as low interest rates brought in unprecedented buyer demand and the number of homes on the market remained unusually low. Remote work enabled some households to move from high-cost housing markets to less expensive ones, where they were able to outbid local buyers. Investor purchases of single-family homes also increased.
The surge in home prices last year has been great for homeowners but has made it more difficult than ever for the first-time home buyer to compete to enter the housing market.
“The people who are winning the housing bids, typically, are folks who have higher incomes or have the equity from their previous home that they’re able to put forward,” said Nicole Bachaud, an economist at Zillow. “That’s definitely a big challenge, I think, when we consider first-time buyers, renters, people who don’t already own a home and aren’t really benefiting from that equity.”
As a whole, U.S. homeowners with mortgages gained more than $3.2 trillion in equity in 2021 compared with a year earlier, according to housing-data provider CoreLogic.
The disparity between wages and the change in home values was more prevalent in some states than others! If you are a homeowner looking to take advantage of your built up equity and level-up your home, reach out! We would love to strategize with you all your options.
If you are first-time home-buyer discouraged by the market, you may have more options than you think. Feel free to schedule a consultation with us to go over in detail every one of those options and let us find you your dream home!