There are a number of reasons buying a home has gotten more expensive over the past few years. First, the lack of homes for sale caused home prices to skyrocket, then the Federal Reserve began raising interest rates to help battle inflation. As a result, mortgage rates climbed higher and affordability became more challenging – especially for first-time home buyers. First-time buyers, because they don’t have the proceeds of a home’s sale to help them cover the upfront costs of buying a home, have to come up with a down payment and the money to cover closing costs mostly from scratch. That can be difficult in an evolving market. These days, especially so. In fact, according to one recent analysis, a first-time home buyer needs to earn an average of $64,500 to afford the typical starter home, which is now selling for $243,000. That doesn’t make homeownership unattainable, but it does mean first-time buyers need to be prepared with plenty of savings, if they hope to succeed in today’s market. (source)
