Housing affordability is at its lowest point in almost two decades. Which my realtor clients can attest to.
It has continued to worsen this year as mortgage rates have hovered above 7% since mid-Aug. Jumping to over 8% in November. Affordability is down 8% from a year ago as the average rate on a 30-year mortgage has risen to its highest since 2000, alongside rising home prices. It costs the average household 44.6% of its income to afford a median-priced home.
My kids are claiming that the only way they can become homeowners is to move farther out. I can’t completely disagree, but economic opportunities are not following, so commutes will remain high with poor transportation methods only available.
Renting is cheaper than buying for many folks. Despite the costs of renting and homeownership both increasing after the pandemic, renting is more affordable than owning in most metro areas. Renting vs. buying comes out even in some cities, like El Paso, Texas, and Pittsburgh. Buying pays off in New Orleans and Jackson, Miss.
Note that the median income of home buyers is now at a record high. It leapt to $107,0000 in 2023 from $88,000 last year as less affluent buyers got priced out. Those prices do not reflect Cook or the collar county prices…