All articles tagged with #home affordability
The White House is considering a 50-year mortgage to improve home affordability, but experts warn it could lead to significantly higher interest costs, slower equity buildup, and does little to address housing supply issues. Critics argue it may also extend debt beyond Americans' life expectancy and potentially inflate home prices, with political and legal hurdles remaining before such a mortgage could be implemented.
New tariffs imposed by President Trump on imported building materials are significantly increasing construction costs, exacerbating the US housing crisis by making homes more expensive and limiting affordability amid a severe shortage of housing and rising homelessness.
The report highlights that the traditional 30% income rule for home affordability is now unrealistic, with Americans needing to spend an average of 44.6% of their income on median-priced homes, and only a few cities like Pittsburgh, Detroit, and St. Louis remain affordable within that threshold.
Zillow's analysis reveals that due to rising home values and mortgage rates, the traditional 20% down payment is no longer sufficient for most buyers. Median-income households now need to put down around 35.4% to afford monthly payments comfortably, with even higher percentages required in expensive markets like Los Angeles and San Jose. This shift is making homeownership increasingly challenging, especially for first-time buyers who often rely on financial help from family.
Mortgage rates have increased to 7.03% for the first time in a month, exacerbating the home affordability crisis. The average rate on a 30-year fixed mortgage rose from 6.94% last week, while the 15-year fixed mortgage rate climbed to 6.36%.
Amending the 1974 National Manufactured Housing Construction and Safety Standards Act to remove the requirement for manufactured homes to be built on a permanent chassis could save homebuyers $175,000 and increase the availability of affordable housing, according to economists Lee Ohanian and James Schmitz. This change would make manufactured homes more attractive, safer, and easier to finance, potentially transforming homeownership for millions of Americans.
Mortgage rates have fallen below 7% for the first time in over a month, with the average rate on a 30-year fixed mortgage dropping to 6.94% and the 15-year fixed mortgage rate falling to 6.24%, according to Freddie Mac's latest survey.
Two recent studies suggest that prospective homeowners in much of the U.S. will need to earn more than $100,000 annually to afford a typical home, marking a significant increase from just four years ago. Factors such as fewer homes on the market, high mortgage rates, and soaring housing prices have outpaced wage gains, making it challenging for many to enter the housing market. The national median household income is around $74,500, but in 22 states and Washington, D.C., aspiring homeowners should earn at least $100,000 per year to afford a typical home, with some major metro areas requiring incomes exceeding $200,000.
A new analysis from Bankrate.com reveals that in 22 states and Washington, DC, a six-figure household income is now required to comfortably afford a typical median-priced home, a significant increase from just six states and the District of Columbia in January 2020. Factors contributing to this include rapid home price appreciation outpacing wage growth, limited housing supply, and the "lock-in effect" of higher mortgage rates and home prices. The West Coast and Northeast require the highest household incomes, while the South and Midwest require the lowest. Affordability changes over time are evident in the significant increase in income needed to buy the average home today compared to 2020, with the Sun Belt becoming less affordable due to an influx of new homebuyers.
Due to skyrocketing mortgage rates and home prices, prospective homebuyers now need to make about $50,000 more than pre-pandemic to afford a home comfortably, according to a Zillow report. The average income required to afford a home has risen to $106,000, which is 80% more than in January 2020. Wages have not kept pace with housing costs, making it increasingly difficult for many Americans to achieve homeownership. As a result, some individuals are turning to "house hacking" or co-buying with friends or family to mitigate costs, but this approach may have long-term downsides.
Due to soaring mortgage rates and home prices, prospective homebuyers now need to make about $50,000 more than pre-pandemic to afford a home, with the average income required being $106,000, an 80% increase from January 2020. Wages have not kept pace with housing costs, making it difficult for many to achieve homeownership, especially younger age groups and individuals with lower incomes. As a result, some are turning to "house hacking," or co-buying with friends or family, to afford a home, but this trend comes with its own downsides.
A new Zillow report reveals that Tampa residents now need an income of $116,329 to afford a home, nearly 50% more than in 2020. It will take 9.8 years for Tampa homebuyers to save a 10% down payment, and the average monthly mortgage payment is $2,364 assuming a 10% down payment. The report also compares the income needed to own a home in Tampa with other metropolitan areas, showing similar affordability challenges in cities like Atlanta, Baltimore, and Minneapolis.
Mortgage rates for 30-year and 15-year mortgages dropped slightly, but homes remain unaffordable in most areas. Home prices are decreasing in some metro areas, leading to increased buyer migration to more affordable cities. Experts predict it will take about three and a half years for the real estate market to become affordable again, contingent on continued interest rate decreases. Credible can help potential homebuyers compare mortgage lenders and rates to find the best option.
Mortgage rates have risen again, reaching an average of 6.69% for a 30-year fixed mortgage, contributing to the ongoing affordability crisis in the housing market as home prices continue to climb. Despite the increase, there has been a recent uptick in purchase activity, but the shortage of existing homes on the market is expected to persist, potentially slowing down the housing market in 2024.
As home prices soar and mortgage rates remain high, Millennials and Gen Z adults with kids are struggling to afford family-sized homes, while Baby Boomers are staying put in their larger homes, contributing to a shortage of smaller homes in familiar neighborhoods. With record high levels of equity and low mortgage rates, Boomers have little financial incentive to downsize, leaving young families with limited options. Affordability is expected to improve somewhat in 2024 as mortgage rates trend down, but a mass exodus of older homeowners selling their homes is unlikely, with only a trickle of inventory expected.