{"id":77899,"date":"2024-05-06T05:00:35","date_gmt":"2024-05-06T12:00:35","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=77899"},"modified":"2024-05-08T14:00:30","modified_gmt":"2024-05-08T21:00:30","slug":"home-mortgages-by-income-analysis","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/home-mortgages-by-income-analysis\/","title":{"rendered":"Low-Income Americans Have Lost the Homebuying Progress They Made During the Pandemic"},"content":{"rendered":"

Roughly 1 in 5 new mortgages went to low-income homebuyers in 2023, down from 23% in 2020. Meanwhile, high-income buyers have gained share because they\u2019re more prepared to weather the storm of high home prices and mortgage rates.<\/span><\/i><\/p>\n

Roughly one in five (20.6%) new mortgages issued last year went to low-income Americans, bringing that group\u2019s piece of the homebuying pie back down to where it was in 2018. Low-income earners gained ground at the start of the pandemic, taking out 23.2% of all new mortgages in 2020, but that progress has since been erased because high home prices and elevated mortgage rates have eroded affordability.\u00a0<\/span><\/p>\n

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This is according to a Redfin analysis of <\/span>Home Mortgage Disclosure Act (HMDA) data covering purchases of primary homes. It does not cover purchases of investment properties or second homes. We categorized home purchasers into four groups according to their household income: Very low, low, moderate and high (see the methodology section for further details). Nationwide, the median household income in the HMDA data for very-low-income households who purchased a home in 2023 was $41,000. It was $64,000 for low-income households, $96,000 for moderate-income households and $172,000 for high-income households. The estimated median overall household income in the U.S. was roughly $84,000 in 2023.\u00a0<\/span><\/p>\n

The small bit of progress that<\/span> Americans earning\u00a0very\u00a0<\/em>low incomes made on taking out mortgages at the start of the pandemic has also been erased. Just under 6% of new mortgages issued last year went to very low income Americans, down from 7.7% in 2020. Very-low-income Americans now make up a smaller percentage of mortgage borrowers than they did in 2018 (7.1%).\u00a0<\/span><\/p>\n

Higher-income homebuyers are taking up the share of new mortgages that lower-income homebuyers have lost in the last several years. While low-income borrowers gained share during the pandemic and then lost it, the opposite has happened with high-income borrowers, who are more prepared to weather the storm of high prices and rates. Nearly half (44.8%) of all new mortgages nationwide went to high-income buyers in 2023, bringing that group\u2019s piece of the pie back up to almost exactly where it was in 2018. Their share dipped to a low of 41.2% in 2020.<\/span><\/p>\n

Homebuying has become increasingly out of reach for lower-income people because housing affordability dropped to a <\/span>record low<\/span><\/a> in 2023 due to sky-high home prices and mortgage rates. Affordability hasn\u2019t improved during the first few months of 2024:\u00a0<\/span><\/p>\n