April 16, 2024 (EIRNS)—There are only 14 U.S. states in which a household earning less than $75,000 per year would still be able to buy a median-priced home, reports a new study by Bankrate, a consumer financial services company. By contrast, in 2020, there were 36 American states in which a household earning the median income could afford to buy a median-priced home. This dramatic change accurately captures the collapse of U.S. living standards, and potential relative population-density.
Currently, half of American households earn the median income of $74,800. Given that the U.S. Department of Housing and Urban Development recommends that a household spend no more than 28% of its income on housing—since it must buy food, clothing, transportation, and so on—that means that it should spend no more than $20,944 per year for its shelter.
But U.S. housing stock has again become a speculative market (though it has cooled off a little recently). According to the Bankrate study, “Americans Need a Six-Figure Salary To Afford a Typical Home in Nearly Half of U.S. States,” between January 2020 and January 2024, home prices have risen: by 65.3% in Arizona; by 67.3% in South Carolina; by 70.1% in Tennessee; by 70.3% in Utah; and by 77.7% in Montana. To afford a median-priced home in Utah, a household requires an income of $133,886—close to double the extant median income—and would have to fork over a mortgage payment of $3,124 per month.
Shelter, one of the most basic elements of a household market basket, is out of the grasp of tens of millions of American families. No matter what the built-in contortions employed to make Gross Domestic Product numbers rise every year, the basics of American households are careening in the opposite direction.
