Five charts to start your day
US homes are becoming increasing unaffordable for most Americans
Home ownership is the US is becoming increasingly impossible for many Americans, particularly first-time buyers. Since the end of 2019, home prices have surged by over 40 percent nationally, defying expectations of a downturn even as the Federal Reserve began raising interest rates.
This price inflation, coupled with skyrocketing mortgage rates, has created a perfect storm of unaffordability. Here’s an example: a $300,000 home with a 10 percent down payment that would have cost about $1,100 monthly in late 2021 now commands around $1,800 per month – a staggering 60 percent increase in monthly costs.
Affordability indices paint a grim picture, with Zillow reporting that typical households now need to allocate over 40 percent of their income for housing costs when purchasing a median-priced home, far exceeding the recommended 30 percent threshold.
This crisis is even more pronounced in burgeoning cities like Denver, Austin and Nashville, not to mention perennial high-cost markets like New York and San Francisco, pushing the dream of homeownership further out of reach for a growing segment of the US population.
Source: The New York Times
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