Even though wages are up, potential first-time buyers are put into a bind when looking for a home.
CNBC reports that, according to Trulia, the number of affordable starter homes on the market fell 12.1 percent this year, and mortgage lenders’ strict credit and income standards are forcing first-timers to spend more of their monthly income (39 percent) towards housing.
Starter home affordability varies across the nation. Based on local median incomes, first-time buyers in places such as Detroit, Memphis, and Kansas City spend less than 20 percent of their earnings on a median price home, while first-timers in Honolulu, New York City, and the Bay Area will spend more than half of their paycheck.
Households moving up to a larger home have it a lot easier, Trulia found. A buyer of a so-called "trade-up" home needs just 25.5 percent of their monthly income. Buyers at the upper end need just 14 percent of monthly income to afford a premium home, according to Trulia's data.