I’m always searching for reasons why things are the way they are. It’s also fun to connect the dots and come up with an investment thesis to make a lot of money. What I’ve recently discovered is that because the minimum qualifying income required to purchase a house is so low, there is still a lot of upside to housing prices.
For years now, I’ve made the case that Americans earn more and are wealthier than we all like to think. And finally, after three years of waiting, the U.S. Census Bureau came out in 2020 with 2019 data saying the real median household income has reached $68,703.
$68,703 is a healthy middle-class income. The question now is: Is $68,703 a high enough household income to afford a median-priced home?
Let’s look at data from the California Association of Realtors (CAR) on the required minimum household income to afford a home.