{"id":1447595,"date":"2024-01-04T03:20:00","date_gmt":"2024-01-04T08:20:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1447595"},"modified":"2024-01-04T03:20:00","modified_gmt":"2024-01-04T08:20:00","slug":"average-us-household-can-afford-only-cheapest-16-of-listed-homes","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/average-us-household-can-afford-only-cheapest-16-of-listed-homes\/1447595\/","title":{"rendered":"Average US Household Can Afford Only Cheapest 16% Of Listed Homes"},"content":{"rendered":"

Average US Household Can Afford Only Cheapest 16% Of Listed Homes<\/span><\/p>\n

\n

Submitted by Sam Bourgi of CreditNews<\/a><\/em><\/p>\n

For the average American, 2023 was the worst year ever for housing affordability\u2014and now there\u2019s more data to back it up.<\/p>\n

<\/a><\/p>\n

According to Redfin data analyzed by Creditnews Research, the average U.S. household can only afford 15.5% of the homes that went up for sale in 2023\u2014the lowest on record.<\/p>\n

By comparison, the average household had the means to buy 20.7% of homes for sale in 2022 and over 40% before the pandemic.<\/p>\n

Redfin data also showed the number<\/em> of affordable homes for sale plunged to record lows in 2023, falling 40.9% to 352,500.<\/p>\n<\/p>\n

According to Redfin\u2019s Lily Katz, \u201celevated mortgage rates and stubbornly high prices made the listings hitting the market more expensive\u201d in 2023.<\/p>\n

This analysis is based on home listings in 97 of the most populous U.S. metro areas. A house is considered \u201caffordable\u201d if the buyer\u2019s mortgage payment is no more than 30% of their region\u2019s median household income.<\/p>\n

The 30% threshold isn\u2019t some arbitrary number.<\/p>\n

The Department of Housing and Urban Development says households that spend more than a third of their income on housing are far more likely to run into financial troubles.<\/p>\n

Redfin’s data mirror Creditnews Research\u2019s Housing Affordability Report<\/a>, which showed that the average American’s mortgage burden is the worst since 1981 when rates peaked at over 18%.<\/p>\n

Although the housing affordability crisis is often blamed on record home prices, it’s the root cause behind those prices that has been working against homebuyers in 2023.<\/span><\/span><\/p>\n

Homeowners aren\u2019t budging<\/h3>\n

Americans who purchased a home before 2021 have built up massive equity as their property values surged during Covid. According to Fed research<\/a>, homeowners saw their equity rise from $139,100 in 2019 to $201,000 in 2022.<\/p>\n

So, why aren\u2019t they selling and cashing in? Because they don\u2019t want to trade in their current mortgage rate for a much higher one.<\/p>\n

According to Creditnews Research<\/a>, 23.4% of existing mortgages were originated in 2021 when rates were below 3%. Another 17.8% of mortgages were originated in 2020\u2014the year the Fed cut interest rates back to zero.<\/p>\n

Now, nearly two-thirds (64.5%) of U.S. mortgages have rates under 4%. These buyers have \u201cgolden handcuffs\u201d<\/a> \u2014they don\u2019t want to give up their current rate for a much higher one.<\/p>\n

Although mortgage rates have declined<\/a> since late October, they\u2019re still double what they were before 2021.<\/p>\n

With homeowners refusing to sell, housing inventories have plunged to 20-year lows, according to the National Association of Realtors (NAR). And less supply means buyers are competing for fewer listings\u2014a feedback loop that keeps pushing prices higher.<\/p>\n

According to NAR data, the housing market has about 3.5 months\u2019 worth of supply at the current sales pace. As a result, existing home sales have plunged to 13-year lows and are on track for their worst year<\/a> in more than four decades.<\/p>\n

<\/a><\/p>\n

Experts predict lower mortgage rates, but will they help?<\/h3>\n

With mortgage rates declining for eight consecutive weeks, industry experts believe rates will continue heading lower in 2024.<\/p>\n

The NAR has pegged 30-year interest rates as low as 6.1% in 2024 before rebounding slightly to 6.3%. The Mortgage Bankers Association has a similar view and expects rates to drop to 6.1% by the end of the year.<\/p>\n

Meanwhile, Mortgage News Daily\u2019s chief operating officer Matthew Graham believes rates could fall even below 5%<\/a> next year.<\/p>\n

Lower mortgage rates should help ease housing costs, but even 5% might not be enough to fix the housing shortage\u2014the root cause of record home prices.<\/p>\n

\u201cThe supply of homes for sale remains scarce,\u201d wrote Nancy Vanden Houten, an economist at Oxford Economics. \u201cLower mortgage rates may bring some sellers off the sidelines, though most homeowners with mortgages still have rates well below current market rates.\u201d<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 01\/03\/2024 – 22:20<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/average-us-household-can-afford-only-cheapest-16-listed-homes<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Average US Household Can Afford Only Cheapest 16% Of Listed Homes Submitted by Sam Bourgi of CreditNews For the average American, 2023 was the worst…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1447595","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-64Aj","jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1447595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1447595"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1447595\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1447595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1447595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1447595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}