U.S. homebuyers now need to earn $50,000 more than renters to afford a typical mortgage as rates spike past 7 percent, fueled by rising Treasury yields and economic uncertainty.
By yourNEWS Media Newsroom
American homebuyers must now earn over $116,000 annually—more than $50,000 higher than renters—to afford a median-priced home, according to new data released by real estate brokerage Redfin. The growing disparity stems from sustained high interest rates, inflation concerns, and volatile market conditions.
“Americans need to earn $116,633 per year to afford the median-priced home for sale, 81.8 percent more than the $64,160 needed to afford the typical apartment for rent,” Redfin said in its statement on April 10.
The median asking price as of April 6 reached $426,910, with monthly mortgage payments averaging $2,813. By contrast, the income required to rent remained steady, while the threshold for homeownership increased more than 82 percent from the $63,925 needed in 2021.
Mortgage rate pressures intensified in recent weeks following the rollout of President Donald Trump’s reciprocal tariff plan on April 2. According to Freddie Mac, 30-year fixed mortgage rates have remained above 6 percent throughout 2024 and 2025. On Friday, they surged above 7 percent, Mortgage News Daily reported, driven in part by spikes in the 10-year Treasury yield.
The yield on the 10-year Treasury, which directly influences mortgage rates, climbed from 3.99 percent on April 4 to 4.50 percent by April 11. Analysts attributed the increase to market fears of inflation and uncertainty around the economic impact of Trump’s tariff strategy. Mortgage News Daily noted that the yield’s week-over-week increase was the largest since 1981.
These macroeconomic conditions have led to market turbulence, with bond prices falling and yields rising. However, in a surprise development, producer prices dropped unexpectedly in March. The White House responded by celebrating what it called “the first drop in consumer prices in several years.”
Despite that, consumer confidence has declined sharply. The University of Michigan’s survey showed inflation expectations rising to their highest level since 1981, amplifying concerns about future housing affordability.
Notably, when mortgage rates dropped for three consecutive weeks, mortgage applications surged. “Mortgage applications increased by 20 percent to its highest level since September 2024,” said Joel Kan, Vice President at the Mortgage Bankers Association, in an April 9 statement.
The housing market has experienced a notable uptick in activity since early April. According to Redfin, nearly one million homes are currently listed, with over 100,000 new listings added in recent weeks. Buyer interest remains high, though tempered by concerns about tariffs and economic uncertainty.
“Tariffs are coming up for the first time. I hosted an open house over the weekend, and some of the younger buyers were concerned about how they’re going to impact the housing market,” said Redfin Premier agent Desiree Bourgeois in a statement on April 10.
“They’re hearing the words ‘tariffs’ and ‘recession,’ and it’s making them nervous that if they buy now, the value of their home will decline, and they don’t know whether mortgage rates will go up or down,” she added. “There’s a lot of uncertainty out there, with buyers trying to understand how their purchase would fit into their personal finances and the broader economic puzzle.”
As of now, the homeownership divide continues to widen, putting increasing pressure on policymakers, lenders, and buyers alike to adapt to rapidly shifting economic conditions.
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