Redfin Reports Low-Income Americans Have Lost the Homebuying Progress They Made During the Pandemic - Seite 2

“There was a sweet spot in 2020 when mortgage rates were ultra low and home prices had yet to skyrocket, allowing some lower-income Americans to break into the housing market,” said Redfin Senior Economist Elijah de la Campa. “But somewhat ironically, the continued strength of the economy has made it harder to afford a home and widened the real-estate wealth gap between rich and poor Americans. The Fed’s interest-rate hikes, meant to help cool inflation and slow a hot economy, have pushed mortgage rates to near their highest level in more than two decades. That’s on top of home prices, which skyrocketed during the pandemic buying boom and have stayed high due to a shortage of homes for sale.”

It’s also important to note that due to the prevalence of all-cash home purchases in today’s market, housing wealth is even more concentrated in the hands of affluent Americans. More than one-third of all U.S. home purchases were made in cash as of February, near the highest level on record, and the share has steadily been rising since 2020.

While high-income Americans made up the biggest piece of last year’s homebuying pie, people at all income levels purchased far fewer homes in 2023 than the year before. The number of U.S. homes bought by high-income earners fell 19% year over year in 2023, and it fell 18% for moderate earners, 22% for low-income earners and 31% for very-low-income earners. That’s because housing costs shot up due to rising home prices and mortgage rates, and inventory dwindled.

Low-income earners take up biggest share of homebuying pie in Minneapolis, Detroit

Low-income earners take up the biggest piece of the homebuying pie in relatively affordable Midwest and East Coast metros, where home prices are lower. Nearly one-third (32.1%) of new mortgages issued last year in Minneapolis went to low-income earners, the highest share of any of the 50 most populous U.S. metros. It’s followed by Detroit (30.8%), Philadelphia (29.9%), Virginia Beach, VA (29.7%) and Baltimore (28.3%).

Low-income earners gained mortgage share from 2020 to 2023 in just three of the metros in this analysis: Chicago (26.5% to 27.7%), Cleveland (26.4% to 27.8%) and Washington, D.C. (26.8% to 27.1%).

Just 1.9% of new mortgages issued last year in Anaheim, CA, went to low-income earners, the lowest share in this analysis. Next come Los Angeles (3.6%), Miami (4.4%), San Diego (5.5%) and San Francisco (6.1%). Those California metros are among the most expensive places to buy a home in the country.