Housing Affordability Worsens in Rural Areas

Rural counties have traditionally been more affordable than large metro areas, but recent data from real estate marketing platform Redfin show that less populated regions are also being hit by the housing affordability crisis. Rural homebuyers now need to earn an annual salary of $74,508 to afford the typical home. Comparatively, rural buyers needed just $36,206 prior to the COVID-19 pandemic, marking an increase of 105.8% over the past five years.

In suburban and urban counties, homebuyers need to earn higher salaries in order to afford a home, but the rate of growth over the last five years is much lower than in rural areas. In urban areas, the income needed to afford a home has climbed by 87.5% from $63,103 to $118,300 per year. In suburban counties, the income needed to afford a home has risen by 90.9%, or from $53,482 to $102,120 per year.

Homebuyers in rural areas have faced relatively large jumps in home prices, which is one reason affordability has eroded. The median sale price in rural counties is $280,900, up 60.5% from $175,000 before the pandemic. By comparison, suburban counties have seen a 48.9% increase (to $385,000 from $258,500) and urban counties have experienced a 46.2% gain (to $446,000 from $305,000).

Income growth also hasn’t kept up. The median household income in rural counties is $69,307, up 33.3% from $52,002 before the pandemic. By comparison, suburban counties have seen a 36.8% gain (to $88,627 from $64,782) and urban counties have seen a 39.3% gain (to $89,784 from $64,468).