Income for home loan applicants has significantly increased

Household income for home loan applicants has increased significantly in the last five years. However, the ability to borrow money has decreased due to rising costs and interest rates. Wealthier buyers are now dominating the market for new home loans. Many lower-income families are holding back from applying for loans, facing pressure from high living costs. Recent data shows that 20 percent of new loan applications came from households earning between $150,000 and $200,000. Additionally, 30 percent of applications came from those earning between $200,000 and $500,000. This is a notable change from five years ago when fewer than 20 percent of new loan applications came from high-earning households in that income range. At the same time, the proportion of applications from households earning between $100,000 to $125,000 has also dropped. Only about 10 percent of new owner-occupier applications fell into this category in late 2024, down from nearly 20 percent five years ago. All these changes highlight the increasing challenges for first-time home buyers, particularly those with lower incomes.