FILE - A home for sale, under contract, on Center Street in Patchogue, New York on May 17, 2022. (Steve Pfost/Newsday RM via Getty Images)
Homeowners have faced a sharp rise in monthly costs over the past five years, reaching new highs just last year.
The median monthly cost of homeownership in the United States increased to $2,035 in 2024, which is up from $1,960 in 2023.
A recent report by the U.S. Census Bureau found that the combination of mortgage rate increases and higher insurance fees, and just an increase in costs in general, are to blame.
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What they're saying:
"One way we measure housing affordability is based on how much households spend on selected costs such as mortgage payments, insurance, taxes, utilities, and various fees," said Jacob Fabina, a Census Bureau economist. "In 2024, the median percentage of income householders with a mortgage spent on these costs was 21.4%, which points to an increased burden on homeowners."
States with the highest monthly mortgage
By the numbers:
- California: $3,001
- Hawaii: $2,937
- New Jersey: $2,797
- Massachusetts: $2,755
- D.C.: $3,181
Dig deeper:
In several metro areas, including San Francisco, Los Angeles, New York and Boston, the annual income needed to afford a median-priced home tops $200,000. In San Jose, it’s more than $370,000.
Rock-bottom mortgage rates turbocharged the housing market during the pandemic, fueling bidding wars for homes that pushed up sale prices, sometimes hundreds of thousands of dollars above a seller's initial asking price. U.S. home prices soared more than 50% between 2019 and 2024.
What’s more, out of the 21.6 million homeowners in the U.S., about 86.6 million paid either a condo or HOA fee, according to the Census.
The monthly average condo or HOA fee in 2024 was $153.
At the same time, renters were also hit with higher costs. The median gross rent, which includes the cost of utilities, increased 2.7% to $1,487 in 2024 from $1,448 in 2023, adjusted for inflation, according to the ACS.
Meanwhile, the median percentage of income going toward rent did not increase in 2024, staying at 31%.
Consequently, the median household income increased in 29 states from 2023, after adjusting for inflation. Twenty-one states, D.C. and Puerto Rico showed no statistically significant differences.
The poverty rate decreased in 13 states and Puerto Rico between 2023 and 2024.
The Source: Information for this article was taken from a FOX Business report and The Associated Press. This story was reported from San Jose.