Crucial Tips To Help Increase Your Income And Boost Home Affordability

Saving, investing, erasing debt and adding a side hustle are ways to boost your income and potentially boost home affordability.

New data reveals that lower income is a contributing factor to buying a home and home affordability is harder for Black Americans than other groups of people.

Black respondents reported a median household income of $52,860 last year, versus $74,580 for races overall, according to the 2022 American Community Survey. Hence, the home-price-to-income ratio for Black households is 8.2, much higher than the 2.6 recommended by financial experts. In contrast, the ratio for all households is 5.8. The findings are tied to a new report by Clever Real Estate.

Based on the 2.6 ratio, an affordable home for a Black American household would cost around $137,400. In comparison, the cost of an affordable home for Americans overall would be nearly $194,000.

The home-price-to-income ratio, a measure that evaluates home affordability, has more than doubled to 5.8 from 2.6 as home prices have soared much faster than income over the past two decades.

Jaime Seale, the report’s author, shared with BLACK ENTERPRISE that Black Americans are underrepresented in senior leadership roles and industries with high job growth and wages.

“With less income, buying a house becomes even more of a challenge for Black Americans and prevents them from building generational wealth that can give their families financial stability for years to come.”

To help boost income and promote home affordability, Seale offered several tips. One piece of advice is to start saving, even if it’s only a small amount. Choose a high-yield savings account, like a certificate of deposit, that will pay you interest. Once you build your savings, you can invest in other assets like stocks and real estate to help you make even more money.

Consider investing in the stock market as soon as possible, a great way to earn passive income. Seale explained that when you’re ready to buy a home, you can use the money you made from investments toward a down payment, closing costs, or paying your real estate agent.

Further, pay off your debt. The reason: all the money that was going to those payments can now be applied to your budget. Use it to invest or stash it in a high-yield savings account.

If you’re willing to sacrifice a bit of time, Seale suggests getting a side hustle, working overtime, or finding a higher-paying job as ways to increase your income.

Also, check out this, which offers multiple ways to help elevate your income.