According to an analysis by the real estate brokerage Redfin, a household with a median income could only afford 15.5% of the homes on the market in the first 11 months of 2023 — the smallest share for any year since at least 2013 and about a third of the 45% range that was more typical prior to the pandemic.
Last year, that share was 21% and in 2021, 39%.Ultra-low mortgage rates were the saving grace during the pandemic buying boom, which has fueled a 46% increase in property prices. But in the past two years, rates have more than doubled to the highest levels in decades, putting a purchase beyond the reach of even more Americans by easily adding $800 a month to a typical mortgage payment.
That’s not only giving prospective buyers at least a little extra breathing room financially but could help with prices too. Current homeowners who are reluctant to give up the super-low interest rates they got during the pandemic may be more willing to sell as rates fall, Redfin said. And that could ease the acute shortage of properties that’s propping up prices.
In the past two months, the average U.S. rate for a 30-year fixed mortgage has dropped from nearly 8% in late October — the highest since 2000 — to 6.67%, according to the mortgage giant Freddie Mac.
That’s not only giving prospective buyers at least a little extra breathing room financially, but could help with prices too. Current homeowners who are reluctant to give up the super-low interest rates they got during the pandemic may be more willing to sell as rates fall, Redfin said. And that could ease the acute shortage of properties that’s propping up prices.
“The national share was calculated by taking the sum of affordable listings in the metros Redfin analyzed and dividing it by the sum of all listings in those metros.”
Ask anyone in Real Estate why you wouldn’t measure what percent of homes being sold are affordable using the above metric.
Not saying current housing affordability isn’t a problem.
Typical income for whom? These analyses always fail to bucket people and houses accordingly.
Yes, people working fast good cannot afford a mansion. But lots of working class people can afford smaller houses, condos, etc.
This is fake rage-bait from the left
I can’t afford the house I mortgaged 15 years ago, and property taxes have been hiked so fast (to steal the federal stimulus plus some), that we’re now destined to be homeless when we’re aged out of the workforce. We bought the smallest, oldest, least expensive house in our area, and bought it when one of our salaries could afford it because we each saw what happened when a spouse grows old or ill. I’ve spent those years repairing it to keep it livable. Something is very broken in this system.
Edit:
Property taxes are the main culprit, but insurance also skyrocketed, then couple that with utilities tripling, food doubling, and everything else it takes to support a family, we’re in a bind. And, downgrading isn’t an option because property tax hikes were relayed right through landlords to tenants and rent far exceeds our mortgage as well. We can’t move to a lower cost of living area because we already did that too. Something is going to collapse soon… and I consider us blessed, fortunate, and frugal, and if we can’t do it, then I know our children won’t be able to, so an entire generation now has been turned into forever indentured servants with no hope.
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According to an analysis by the real estate brokerage Redfin, a household with a median income could only afford 15.5% of the homes on the market in the first 11 months of 2023 — the smallest share for any year since at least 2013 and about a third of the 45% range that was more typical prior to the pandemic.
Last year, that share was 21% and in 2021, 39%.Ultra-low mortgage rates were the saving grace during the pandemic buying boom, which has fueled a 46% increase in property prices. But in the past two years, rates have more than doubled to the highest levels in decades, putting a purchase beyond the reach of even more Americans by easily adding $800 a month to a typical mortgage payment.
That’s not only giving prospective buyers at least a little extra breathing room financially but could help with prices too. Current homeowners who are reluctant to give up the super-low interest rates they got during the pandemic may be more willing to sell as rates fall, Redfin said. And that could ease the acute shortage of properties that’s propping up prices.
In the past two months, the average U.S. rate for a 30-year fixed mortgage has dropped from nearly 8% in late October — the highest since 2000 — to 6.67%, according to the mortgage giant Freddie Mac.
That’s not only giving prospective buyers at least a little extra breathing room financially, but could help with prices too. Current homeowners who are reluctant to give up the super-low interest rates they got during the pandemic may be more willing to sell as rates fall, Redfin said. And that could ease the acute shortage of properties that’s propping up prices.
“The national share was calculated by taking the sum of affordable listings in the metros Redfin analyzed and dividing it by the sum of all listings in those metros.”
Ask anyone in Real Estate why you wouldn’t measure what percent of homes being sold are affordable using the above metric.
Not saying current housing affordability isn’t a problem.
Typical income for whom? These analyses always fail to bucket people and houses accordingly.
Yes, people working fast good cannot afford a mansion. But lots of working class people can afford smaller houses, condos, etc.
This is fake rage-bait from the left
I can’t afford the house I mortgaged 15 years ago, and property taxes have been hiked so fast (to steal the federal stimulus plus some), that we’re now destined to be homeless when we’re aged out of the workforce. We bought the smallest, oldest, least expensive house in our area, and bought it when one of our salaries could afford it because we each saw what happened when a spouse grows old or ill. I’ve spent those years repairing it to keep it livable. Something is very broken in this system.
Edit:
Property taxes are the main culprit, but insurance also skyrocketed, then couple that with utilities tripling, food doubling, and everything else it takes to support a family, we’re in a bind. And, downgrading isn’t an option because property tax hikes were relayed right through landlords to tenants and rent far exceeds our mortgage as well. We can’t move to a lower cost of living area because we already did that too. Something is going to collapse soon… and I consider us blessed, fortunate, and frugal, and if we can’t do it, then I know our children won’t be able to, so an entire generation now has been turned into forever indentured servants with no hope.