Arizona homebuyers need to earn $122,578 annually to afford a home

PHOENIX (AZFamily) — When it comes to Valley home prices, the numbers may be shocking. The most recent statistics indicate the average home sales price mainly in Maricopa County rang in at $615,271, with the median sale price being $454,990.

That begs the question of whether buying a home for first-time homebuyers is realistic. “Well, it really depends on where you’re talking about,” said Jeff Ostrowski, a real estate expert with Bankrate.com.

Ostrowski and Bankrate researched how much annual income you need to afford a typical house in the United States. And when it comes to Arizona, the number is the highest it’s ever been.

In 2020, Arizonans needed to earn around $71,881. But today, you’ll need to make $122,578 a year. “That’s household income. So most home buyers are couples and many of those couples have two incomes. So we’re not saying that, you know, one single person has to be pulling down 120K,” Ostrowski said.

But, how did Arizona get to this point where you need to earn in the triple digits to buy your first home? Well, according to Ostrowski, you can thank out-of-state buyers for that one. “For somebody moving from California. where the median was, I don’t know, $800,000, or maybe a million dollars, they had the cash to bid up home prices at Arizona,” he said.

As a result, the age for first-time homebuyers has increased dramatically. “Americans are putting off home buying. So, you know it’s first-time homebuyers are closer to 40 years old than to 30 now,” Ostrowski said.

If your household income isn’t $122,578 a year, but you still want to get into real estate, you can. Ostrowski says to talk to a lender about special programs that offer just 3% down instead of the traditional 20%. Also, ask your lender about mortgage assistance programs that offer thousands of dollars up front to get into a home, but some of it may have to be returned when you sell.

Another option is buying a condo or a townhome because the price point is a little lower. “I mean, it’s not really the picket fence and the swimming pool that most people think of when they when they envision that American dream you referred to. But, I mean, the reality of this housing market, the reality of record high home prices, the reality of the affordability squeeze is that buyers have to rein in expectations,” said Ostrowski.

By the way, Bankrate found the states where you need the most income to buy your first home are Washington D.C., Hawaii, California, Massachusetts and Colorado. Click/tap here to read the full report.

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