How Much House Can You Get in New Jersey on a Median Salary?
The dream of homeownership is increasingly difficult for many Americans due to rising prices and mortgage rates. Just how much do you need to save and earn today to purchase a typical home in New Jersey and nationally? Let’s examine the latest data.
According to the National Association of Realtors (NAR), the median existing single-family home price in the U.S. reached $398,500 as of August 2022, up 7.7% from one year earlier.1 Experts forecast nationally this figure will rise to around $415,000 by October 2023, a 10% annual increase.2
For New Jersey, the median home price was $490,000 as of Q2 2022 based on data from NAR and the New Jersey Realtors association.3 Projections estimate this figure will hit $525,000 in October 2023, up around 15%.4
With a recommended 20% down payment, buyers in New Jersey may need around $105,000 saved. Nationally, approximately $83,000 would be required. Today’s average 30-year fixed mortgage rate is about 7%, compared to 3.5% in late 2021.5
Given current rates and prices, the monthly mortgage payment on a median U.S. home is forecasted to be $2,350 in October 2023.6 For New Jersey, it could reach $2,975. Using the 28% guideline for housing costs, national homebuyers may require a minimum annual income of $100,000. For New Jersey, the required income is approximately $128,000.
However, median household income has not kept pace, estimated at $74,000 nationally and $93,000 in New Jersey as of October 2023.7 So typical earners still fall below what’s needed to afford a median priced home today.
First-time buyers face lower median prices, around $380,000 nationally.8 But high rates still make purchases difficult without stretching budgets. Expanding your search area, adjusting expectations, and utilizing buyer assistance programs are essential.
While challenging, homeownership can still be within reach with diligent planning and saving. But buyers must calculate affordability based on current prices and rates. Getting pre-approved early is key to understand true payments and options.
Though difficult for many, the dream of owning a home remains possible in 2023 for dedicated purchasers. Staying informed on latest market conditions and mortgage offerings helps buyers make smart decisions. With careful preparation, you can still achieve the financial and lifestyle benefits of homeownership today.
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