Housing Affordability Plummets to 39-Year Low

The affordability of housing in the United States has reached its lowest point since 1984, with nearly 41% of the median household's monthly income required to cover the principal and interest payments on a median-priced home. High mortgage rates and soaring home prices have made it increasingly difficult for prospective first-time homebuyers to enter the market, forcing many to rent instead. The surge in mortgage rates, driven by turmoil in the bond market and the Federal Reserve's efforts to combat inflation, has further exacerbated the situation. Despite the high borrowing costs, home prices continue to rise due to a supply shortage, benefiting existing homeowners but leaving younger Americans struggling to afford their first homes.