The pathway to achieving the American dream of owning your own home has become cloudy, to say the least, in the last five years. Under the President Biden economy, affordability for most things has skyrocketed, from groceries to home prices. Add in the highest interest rates in decades, plus low salaries, and you have a recipe for people staying in apartments, or living at home, for the foreseeable future.

It has only gotten worse as we near the end of Biden's term. A new study from Oxford Economics revealed recently that a household in 2024 needs an average income of $107,000 to afford a new single-family home. That is compared to just 2019, when that number was only $56,000. It has doubled in just five short years.

The study also found only 36 percent of households earned enough to buy a home last quarter, which is a sharp drop from the 59 percent who could in 2019. KTRH Money Man Pat Shinn says the high interest rates, and low salaries, have created a vacuum, especially among the rookie buyers.

"Back in 2019, first time buyers made up 33 percent of all home purchases...compared to this year, which is 24 percent, the lowest numbers since the data started being tracked in 1981," he says.

The list of least affordable cities was no surprise. It includes San Jose, San Francisco, Los Angeles, San Diego, and Honolulu. What do they have in common? All of them are staunchly Democrat. The most affordable ones were places like Louisville, Oklahoma City, and Memphis.

Here in Houston, things are rough, but not nearly as bad as other cities.

"Housing costs here are 19 percent below the national average, which is good for a metro area," he says. "In another study, 38 percent of Houston households can afford the median priced home, which is right in line with the national average."

Median home prices in the area are currently around $365,000, according to the Federal Reserve. Compare that to other cities in Texas, like Dallas, where the median price is about $445,000. So, overall, Houston is in decent shape, even if home prices have increased 40 percent in the last year.

But the costs of homes for everyone else continues going up to unaffordable levels, setting numerous records in 2024. So, how do we get the costs to come down? Usually, it is a supply and demand issue, but Shinn says adding supply will not help anything this time.

"Affordability will not come down until we get lower mortgage rates...how do we get those? Unless we have an unforeseen recession or economic slowdown, they will not come down anytime soon," he says.

Interest rates will also need to come down, but Shinn says that will not happen until the economy gets back on level footing, and begins prospering again.

The Clay Travis and Buck Sexton Show