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Boston condos prices above affordability?

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Boston condos prices above affordability?

A Boston condo buyer needs 80% more income than was needed in 2020. The median household income has grown only 23% during the same period.  

The income today’s homebuyers need to buy a typical U.S. home has grown 80% since 2020. 

A new Zillow report highlights the disparity between wage growth and the increase in the cost of buying a home from 2020 to the end of 2023. 

And while home prices have grown faster than wages, today’s mortgage rates are also responsible for monthly housing costs that are nearly twice what homebuyers paid in 2020. 

The most affordable markets for homebuyers are Pittsburgh, Memphis, and Cleveland. And, no surprise, California leads U.S. metros with the highest incomes required to afford a home. 


Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates and rent growth far outpaced wage gains. 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.

a senior economist at Zillow

The monthly mortgage payment on a typical home has almost doubled since January 2020—rising 96.4% to $2,188. And that’s assuming a 10% down payment, which is beyond the financial means of many aspiring homeowners. 

Since January 2020, home values have climbed 42.4%, and the typical U.S. home is now worth about $343,000. Back in 2020, mortgage rates around 3.5% kept monthly housing costs affordable for homebuyers who could manage a down payment. 

At the time of Zillow’s analysis, mortgage rates were at a weekly average of 6.6%, nearly doubling 2020 rates. Today’s weekly average is closer to 7%.


Today’s household making the median U.S. income would need an average of 8.5 years to save enough for a 10% down payment on a typical home—about a year longer than in 2020. 

So, it’s no wonder more homebuyers are getting creative to afford a home purchase: 

  • Using loans or gifts from family/friends to cover their down payment
  • House-hacking —i.e., renting out part of their home/property to help with monthly costs
  • Co-buying a home with a friend or relative 

With mortgage rates driving up the monthly mortgage payment, most younger buyers—millennials and Gen Z—are planning to rent out part (or all) of their home to earn rental income. Buyers in these demographics look for a home’s “house-hacking” potential as key criterion. 

Roughly one out of five (21%) homebuyers are also sharing the cost of a home purchase by co-buying a property with a friend or relative. 


In some metros, it’s easier for someone earning the median household income—or less—to afford the typical home in their market. 

For example, these five metros require the lowest incomes to afford a typical home:

  1. Pittsburgh, PA (Income needed to afford a typical home: $58,232)
  2. Memphis, TN ($69,976)
  3. Cleveland, OH ($70,810)
  4. New Orleans, LA ($74,048)
  5. Birmingham, AL ($74,338)

That said, the only major U.S. metros where a typical home is affordable to a household making the median income are these three: 

  1. Pittsburgh, PA
  2. St. Louis, MO
  3. Detroit, MI

And in these seven major metro areas, homebuyers need a household income of $200,000 or more to afford a typical home in their market: 

  1. San Jose, CA (Homebuyers need a minimum household income of $454,296)
  2. San Francisco, CA ($339,864)
  3. Los Angeles, CA ($279,250)
  4. San Diego, CA ($273,613)
  5. Seattle, WA ($213,984)
  6. New York City, NY ($213,615)
  7. Boston, MA ($205,253)

Source: Zillow

Read the full report for more information, including methodology. 


Boston condos prices above affordability?


Boston condos prices above affordability?

Home values are 25% above affordability norms, the worst it’s been in years, according to a new report from Zillow. That increase is forcing many Boston condo buyers to reset their expectations, with the market reflecting those decisions. 

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Boston condos

How much has the average mortgage payment increase from last year?

Nationally, the average monthly mortgage payment is now $1,850, 75.5% or $800 higher than it was a year ago. Even as home values dropped from their June peak, rising rates aren’t helping any affordability gains buyers had. 

Zillow senior economist Nicole Bauchaud said the next several years appear to be set up for affordability to be a major challenge for homebuyers. 

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Boston condos for sale

How is the home sale inventory?

Inventory remains tight, real income growth is dismal, mortgage rates show no signs of dropping, and there is plenty of pent-up demand ready to bid prices back up if they reach a level would-be buyers can once again afford. Filling the housing deficit continues to be the key to long-term affordability, but the recent slowdown in single-family construction is not a good sign that the market is getting closer to building enough to meet demand.

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Boston condos for sale

How much do home values need to decrease to become affordable for average buyer?

According to Zillow, home values would have to fall 24.7% for mortgage affordability to return to the 22.8% norm, but while some markets are closer to that, many have seen deteriorating affordability with some at least 37% above where they need to be.

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Boston condos for sale

What is the average Boston salary compared to Boston condo prices? 

Boston’s typical home value is $651,398. Its median household income of $104,440 means the share of income needed to afford a typical mortgage is 37.8% compared to its 32.2 % historical norm.

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