T
rying to afford a home in 2024? Forget about disposable income. A new report by the JPMorganChase Institute reveals that today's typical homebuyer spends 45% more of their income on mortgage payments than they did in 2019, with affordability at "historically low" levels.

    The rapid deterioration in housing affordability is largely due to post-pandemic price hikes and interest rate increases. First-time homebuyers, typically between the ages of 25 and 44, are particularly affected. Almost half of American homeowners' disposable income now goes towards their mortgages.

    Home prices have surged by 50% since 2019, according to the Federal Reserve Bank of St. Louis, while mortgage costs have nearly doubled due to higher rates. The typical monthly mortgage payment has increased by around $600, outpacing wage gains. This bleak outlook may be contributing to buyer skittishness, with for-sale housing stock piling up and the median age of first-time buyers reaching a record high.

    The affordability gap has widened most in less densely populated areas, where American 24- to 44-year-olds now spend an average of 58% of their monthly incomes on mortgages. This is a stark contrast to the 30% spent by the same age group in 2019. The report notes that hopes of affording a home have narrowed most in suburbs, smaller metros, and rural areas, where residents missed out on higher income gains enjoyed in densely populated metros due to increased post-pandemic demand.