New analysis of homeownership rates in the U.S. found that income isn't a significant factor for a household to decide whether or not they want to buy, except for couples under age 35.
One aspect of homebuying where income does matter is saving up for a down payment, which in turn affects the homeownership rate. If a buyer were to put 20 percent down on a median-priced home by saving 10 percent of their current income annually, the composition of their household would dramatically affect their homebuying timeline, according to Zillow's research. Single earners would need more than 12 years, while partners with two incomes would need 3.6 to 4.9 years.
There is much conversation in the media and around the water cooler about the impact of the recently enacted tax reform on housing markets. The doubling of the standard deduction, the limits on state and local tax deductions, and the cap on mortgage interest deductions all reduce the financial incentive for homeownership. What’s important to remember is that while money is important, the decision to buy has more to do with a household’s stage of life.
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