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Buyers need 6-figure income to afford median-priced home in West Palm Beach area, study says

Florida home buyers facing affordability hurdles amid high-interest rates
Posted at 5:33 PM, Nov 17, 2022
and last updated 2022-11-17 22:52:53-05

WEST PALM BEACH, Fla. — The cost of buying a home in Palm Beach County isn't getting any cheaper. Demand for homes is still high and interest rates are higher now than in previous decades.

Buyers currently have to be able to afford a $2,800 mortgage payment to buy a median-priced home in West Palm Beach, according to a new report by Redfin, a real estate mortgage brokerage.

The study found that across the country you have to make a six-figure salary in order to afford a typical home.

So, how can the average buyer work around these challenges and still afford to buy a home?

"We're losing, I don't know, an hour and a half [of time] each day because we have to drive so far," teacher Cheyne Seleski said.

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Cheyne Seleski, a Palm Beach County teacher, discusses the current struggles that he and his wife are facing trying to buy a home.
Cheyne Seleski discusses the current struggles that he and his wife are facing trying to buy a home.

When the last bell rings for Seleski and his wife, who are both teachers at Royal Palm Beach High School, they have to drive an hour home to their children in Martin County.

"As teachers, we don't make a ton of money," Seleski said. "But with interest rates super high, yeah, it just doesn't make sense to try and buy a home right now."

The Seleskis said they can't afford to buy a home in Palm Beach County right now.

The Redfin report said that buyers need a six-figure income to afford a median-priced home in the West Palm Beach metro area.

The study found that across 40 metro areas in the U.S., including West Palm Beach, homebuyers need to earn at least 50% more than they did a year ago to afford a median price home. This news comes as salaries are not keeping up with that demand.

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Jordan Barthelemy, Century 21 real estate agent
Jordan Barthelemy explains some of the strategies that people can use to buy a home as interest rates continue to rise.

"It was probably the biggest percent increase that we've had in a long time," Seleski said. "It's like either high 3s or low 4s, but when you're seeing 7-8% inflation, you're actually making less money this year."

The cash-buying craze is slowing down, according to real estate agents, so now there's not as much competition for home buyers seeking mortgages. But Redfin's report shows nationally the average mortgage rate jumped from 3.1% a year ago to 6.9% last month.

"What we say in my office is 'date the rate and marry the house,'" Century 21 real estate agent Jordan Barthelemy said. "We can always refinance."

Barthelemy said don't let the headlines of higher rates scare you. There are ways to get a lower mortgage rate.

"We have a two-for-one buy down, which allows for the buyer to go into the home with 2% lower than the interest rate they have," Barthelemy said. "The second year they go 1% lower than the interest rate they have."

As for Seleski, he and his wife will keep looking for the right house and an affordable rate.

Redfin also has an affordability calculator where prospective buyers can input your household income, monthly debts, how much you can give on a down payment and where you’re looking to buy to find out realistically what you can afford.