Zillow: Homebuyers need to earn 80% more in 2024 than in 2020 to afford a house

(WISH)– Homebuyers need to earn 80% more in 2024 than in 2020 to afford a house in this market and it’s not just due to high mortgage rates, according to Zillow.

According to a media release from Zillow, home shoppers need to make more than $106,000 to comfortably afford a home. That is 80% more than in January 2020.

“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains,” said Orphe Divounguy, a senior economist at Zillow, in a statement. “Buyers are getting creative to make a purchase pencil out, and long-distance movers are targeting less expensive and less competitive metros. Mortgage rates easing down has helped some, but the key to improving affordability long term is to build more homes.”

According to the report, homeowners in Indianapolis need to make $82,037 a year to afford a mortgage in 2024, a $38,150 increase from 2020.

“Since January of 2020, the typical mortgage payment on the typical home in the U.S. has nearly doubled,” Divounguy said.

CNBC spoke with Kirabo Jackson, an economist and member of the White House Council of Economic Advisers, about the report. Jackson said the connection between housing costs and wages has been gradually separating over the years. “Around the mid-’90s, you start to see housing prices sort of separate from median wages in a way that kind of made housing less and less affordable for people who are in the market,”

Both Jackson and Divounguy agreed that more affordable housing could help. But that’s easier said than done.

“If you really wanted to expand the supply of housing, one of the most immediate ways one could do that would be to ease up on these zoning restrictions and allow the construction of affordable housing in areas that currently would not be allowed under local land-use rules,” Jackson said.