Saturday 13 August 2022 04:25 PM Buying a home in America is now the LEAST affordable it's been in 33 years trends now

Saturday 13 August 2022 04:25 PM Buying a home in America is now the LEAST affordable it's been in 33 years trends now
Saturday 13 August 2022 04:25 PM Buying a home in America is now the LEAST affordable it's been in 33 years trends now

Saturday 13 August 2022 04:25 PM Buying a home in America is now the LEAST affordable it's been in 33 years trends now

Buying a home in the US is the least affordable it's been in 33 years as mortgage rates soar this year and home prices hit record highs. 

The National Association of Realtors' revealed Friday that its housing-affordability index - a metric that uses median existing-home prices, median family incomes and average mortgage rates to calculate home affordability - fell to 98.5 percent in June, the lowest level since 1989. 

An index of 100 means the average family has more than enough income required to buy a home, with a dip below that mark suggesting households are struggling to enter the housing market.   

The index has been falling since October, where it was at 149.4, and existing-home sales have been on the decline for the fifth straight month.

The average mortgage payment also jumped to $1,944 in June, a 33 percent increase compared to the $1,297 average back in January.  

The change depicts a real estate market that is becoming increasingly inaccessible for first-time home buyers, who have been deterred from entering the market by the rapidly rising home prices - which reached a record median of $416,600 in June.

The National Association of Realtors' found that its housing-affordability index - a metric that uses median existing-home prices, median family incomes and average mortgage rates to calculate home affordability - fell to 98.5 last June, the lowest recorded in 33 years

The National Association of Realtors' found that its housing-affordability index - a metric that uses median existing-home prices, median family incomes and average mortgage rates to calculate home affordability - fell to 98.5 last June, the lowest recorded in 33 years 

Although most regions in America were above or nearly at the 100 point marker, the West is seeing a significant decline with an index score of 69.6 percent

Although most regions in America were above or nearly at the 100 point marker, the West is seeing a significant decline with an index score of 69.6 percent

As the average mortgage payment hit $1,944 in June, Americans are struggling to make ends meet. The NAR says anything over 25 percent of household income going to mortgage payment means that homes are not affordable

As the average mortgage payment hit $1,944 in June, Americans are struggling to make ends meet. The NAR says anything over 25 percent of household income going to mortgage payment means that homes are not affordable 

While houses were flying off the shelfs last year, the market has seen a significant slow down amid high mortgage rates and home prices

While houses were flying off the shelfs last year, the market has seen a significant slow down amid high mortgage rates and home prices

According to the NAR's report most regions in America were above or nearly at the 100 point marker, with the national average dragged down by a struggling Western market. 

In the West, the affordability index was at 69.6, a significant drop from the 97.6 it was last year. The South's index was 99.3, falling from 147.9 in 2021. 

Although their indexes were above 100, the Northeast and Midwest also saw significant drops, both falling by 30 percent.   

Last year, Americans were in a rush to purchase homes after the Federal Reserve slashed interest rates to near zero and the housing market enjoyed mortgage rates in the low 3 percent range. 

In July 2021, the typical home went under contract in just 15 days, according to Redfin.

But after the Federal Reserve began its most aggressive drive in over three decades to increase interest rates in order to tame record-high inflation, mortgage rates nearly doubled, shocking the housing market.  

The national median home price jumped 13.4 percent in June from a year earlier to $416,000, an all-time high

The national median home price jumped 13.4 percent in June from a year earlier to $416,000, an all-time high

Average long-term U.S. mortgage rates soared this week as the key 30-year loan rate jumped back over 5 percent

Average long-term U.S. mortgage rates soared this week as the key 30-year loan rate jumped back over 5 percent

The increase cost and rates came as American's contended with 40-year high inflation, which finally saw a cooldown last month but remains at historically high levels

The increase cost and rates came as American's contended with 40-year high inflation, which finally saw a cooldown last month but remains at historically high levels

As the rates almost hit 6 percent earlier in the summer, competition took a hit, and it has dropped for six consecutive months, ending the bidding war frenzy. 

'The market is wildly different than it was a few months ago. Buyers are competing with one to two other offers instead of four to eight. Some aren't facing competition at all,' said Alexis Malin, a Redfin real estate agent representing buyers in Jacksonville, Florida. 

'There's not the same sense of urgency. House hunters are scheduling tours four days in advance instead of one, and they're becoming much more selective,' he added. 

'If a home doesn't check all of their boxes, they're waiting until they find one that does. Six months ago, buyers were taking any house they could get.'

Nationwide, agents for brokerage Redfin faced competing offers in just 44.3 percent of their bids in July, down from 63.8 percent a year ago and the lowest share since April 2020

Nationwide, agents for brokerage Redfin faced competing offers in just 44.3 percent of their bids

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