Important Takeaways:
- Mortgage payment on a typical home nearly doubled in last 4 years, report finds
- In case you needed more evidence to explain why U.S. consumers aren’t exactly cheering in the stands for this all-in-all pretty-good economy, let’s look at exhibit one: housing affordability.
- The real estate firm Zillow reports that since January 2020, the monthly mortgage payment on a typical U.S. home has nearly doubled. It’s up 96% in just four years.
- According to Zillow, a typical buyer will now pay nearly $2,200 a month, with a 10% down payment. Meaning, homeownership now costs well above the 30% of median income that was once thought to equate to “affordable” housing cost in America.
- And with the 30-year fixed-rate mortgage hovering around seven percent right now, there’s not a whole lot of light at the end of this tunnel.
- With prices rising by leaps and bounds, it’s been a good time to sell a home. But it’s not so great to try to buy, says Orphe Divounguy, senior economist at Zillow.
- “After the surge in home-buying demand and mobility during the pandemic, and the doubling of mortgage rates, home-shoppers now need to earn $106,000 to afford the median home in the United States,” said Divounguy.
- Back in 2020, the salary needed to afford the median monthly mortgage payment was just $59,000. Real estate broker Israel Hill has seen the affordability crunch in Portland, Oregon.
Read the original article by clicking here.
