How much should your salary be to buy a house in 2024
In 2024, buying a home has become a nearly impossible task as recent studies reveal the truth about home affordability.
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Affordable housing remains a pressing issue in Fayetteville as recent property tax increases, high interest rates and rising home insurance costs make homeownership increasingly difficult for low- and middle-income families, according to real estate experts in the area.
As Fayetteville continues to expand with projects like the $1 billion titanium factory, the Crown Event Center and the Amazon facility on Bragg Boulevard, the supply-demand gap in the housing market is widening due to limited supply and high rental prices, Mayor Mitch Colvin said late last month.
“What we learned through the housing study is that if you’re paying more than 30% on rent or mortgage, you’re paying more than you can afford,” Colvin said. “And that causes people to have a hard time or an emergency and now suddenly they’re behind.”
A study on affordable housing commissioned by the city in 2020 and completed in July 2021 found that the median home sales price in Fayetteville has increased more than 40% over the past 3.5 years, making it more difficult to find affordable housing. The study analyzed Fayetteville’s population and found that while the city has grown over the past decade, the number of new housing units has declined, contributing to an imbalance that is resulting in a constrained housing market.
A restricted market, meaning sellers cannot keep up with changing demand, combined with low-paying jobs are the main factors causing many households to be under financial pressure due to housing costs, according to the study.
Rachel Englehart, a real estate agent and investment specialist at Main Street Realty in Fayetteville, said last week that down payment assistance programs, such as Fayetteville’s Homebuying HERO program, allow families to use grants to purchase a home, making homeownership more affordable for low- and moderate-income families.
“It would be great if there was some kind of tax break for first-time home buyers or for affordable homes, but right now the tax and insurance situation makes it difficult for anyone to get a home here,” Englehart said.
She said homeowner’s mortgage payments can often increase by $500 to $1,000 a month due to home insurance, property taxes and interest, making an otherwise affordable home unaffordable for lower-income families.
What does affordable housing look like in Fayetteville?
According to Zillow, the median monthly rent in Fayetteville was $1,400 as of August 11, while the average home price was $218,174 – a 6.6% increase from 2023. For the average monthly rent of $1,400 to represent 30% of a household’s total income, the household’s annual income would have to be about $56,000.
Colvin said when supply is low and demand is high, prices rise due to limited choice, which can prove challenging for lower-income families.
Another reason for the high rents in Fayetteville is that many tenants are members of the military and receive housing assistance based on their rank and the number of dependents – an amount that can serve as a guide for many landlords.
“Unfortunately, it’s a big problem when people are working and not getting housing assistance,” Colvin said. “I’m a big proponent of home ownership. I’ve set a goal and presented it to the city council to create 300 new homeowners in this two-year term.”
Colvin said that by advocating for a down payment assistance program previously available only to city employees, the Homebuying HERO program was recently expanded to include employees of Cape Fear Valley Medical Center, Cumberland County Schools and Cumberland County government. Potential homebuyers can receive up to $30,000 in bridge financing through a 0% fixed-rate loan, depending on the applicant’s HERO tier.
“The final point is, ‘What can we do as a city to make the construction process easier and more efficient for builders to encourage more construction?'” he said. “We’re looking at how we can create incentives. We have a voter-approved housing fund that we have money from that we’re trying to find creative ways to encourage construction or reduce construction costs.” In 2022, city residents voted in favor of a $12 million housing bond.
Is home ownership possible in Fayetteville?
Colvin said he has asked the city council to evaluate unused municipal or public land to decide whether it can be auctioned or included in an incentive package for builders. He said this would reduce land and development costs and ultimately benefit consumers by making housing more affordable. Although the initiative is still being refined before it goes to council for approval, Colvin said builders are required to deliver the finished product within a certain price range to ensure affordability.
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He said 60% of Fayetteville’s population is renters. He said he would like to see a 50-50 split between homeowners and renters, but understands that given Fort Liberty’s population, “renting is an option for some people because it’s a transit community.”
Natasha Eyada, a real estate agent with Main Street Realty, said last week that owning a home is beneficial in the long run because it allows you to generate future residual income. She said that by paying rent, you are contributing to someone else’s financial future rather than your own, which is the equivalent of throwing money out the window.
“I would definitely encourage everyone to try to own a home,” Eyada said. “You’re leaving something for your family, your children, for generations.”
The median price for a single-family home is about $350,000, the average median annual income in Fayetteville is about $35,000, Colvin said, and there is a lack of affordable single-family homes in Fayetteville.
Colvin said Fayetteville’s older, established neighborhoods like Broadell offer potential for new development because of existing infrastructure like water and sewer, which lowers development costs. He said he would like to take action to create more affordable housing in densely populated areas and expand outward.
He said the city is short at least 15,000 housing units, and that this shortage could be addressed by revaluing vacant city-owned land and auctioning it off to the highest bidder for development.
“We’ve been very proactive in trying to bring more rental housing onto the market so landlords can’t name their prices,” Colvin said. “And we need to raise wages. That’s what we’re working on.”
Reporter Lizmary Evans covers growth and development for The Fayetteville Observer. You can reach her at [email protected]
