Mortgage payments are not increasingly affordable for homebuyers

Home prices continue to skyrocket nationwide, but home buyers' incomes are not keeping up with soaring real estate prices. Result:Monthly mortgage payments are not affordable for regular buyers.

This is, according to the Atlanta Federal Reserve's calculations,is, and households with a median income need to spend at least 32% of their annual income to pay the median. I found that there is. Priced Homes — Or exceed the 30% threshold of affordable prices used by the US Department of Housing and Urban Development. Analysis shows that affordability for homes is at its lowest level since 2008. 

These trends have exacerbated some Americans' outlook for home purchases, with only three out of ten people surveyed by Fanny May in Augustbuying. I believe it's a good time to do, down from nearly 6 out of 10 in May. According to Realtor.com, home prices in September rose almost 9% year-on-year, and home prices across the country soared. Mortgage rates were at record lows, but rising home prices will lead to higher monthly spending for new homeowners. 

"This points out that home prices are rising astronomically in pandemics, and home prices are rising for first-time homes. It's out of reach. Buyers. " Zillow's senior economist, Jeff Tucker, talked about the Atlanta Federated Bank's analysis. 

He added, "It's not surprising that these affordable indicators show signs of warning. The average homebuyer can't afford to buy a home. That's it. "

According to the Atlanta Federal Reserve Bank, calculated based on July housing and income data, typical homebuyers cover mortgages, property taxes, and mid-price home insurance. You have to pay about $ 1,800 a month for this. , The latest month of bank analysis. A year ago, the typical monthly cost of owning a home was just over $ 1,500. 

Median home prices in July exceeded $ 342,000, up 22% from about $ 279,000 in the previous year. However, income has not caught up and has risen by about 3% over the same period, leading to an affordable crisis for some homebuyers. 

Mortgage Interest Rates: "Why Act Now"

The past year and a half has created the worst situation for homebuyers as well as affordability. Has been proven. Bidding wars, inventory shortages, and other challenges have created a stressful home-finding experience for many. When the home market heats up in the spring, some homebuyers far exceed the asking price, inspections and other contingencies to secure the winning bid{112. } Abandoned.

The current state of the housing market reflects several trends, including the transition to remote work during a pandemic, and some workers are looking for homes with more space than offices. I did. According to Realtor.com, about 5 million millennials turn 30 each year and enter a decade of life when they are calm and trying to own a home. 

And mortgage rates remain at historically low levels, helping to offset rising home prices. The average interest rate on fixed-rate mortgages for 30 years was about 2.9% in September, which was almost 4% in 2019 before the pandemic, but wasaccording to Freddie Mac.

"Mortgage rates are another reason why people are better off acting faster than later," Tucker said. "There was a reason for an unusually large number of people to act now" to fix at a low rate. 

Additional Years to Save Down Payment

However, a typical first-time homebuyer saves 10% of his income to absorb a traditional down payment. It takes about 6.4 years to do 20%, or a year longer than five years ago, due to soaring home prices, and according to a recent Zillow analysis,lessees maintain their pace. You need to save an additional $ 369 per month for this. The expected rise in house prices was said by housing companies. 

Demographic homebuyers are feeling the tension of rising home prices, but due to racial wealth gaps, blacks and Latins are more than white buyers. Tucker added that it could affect his family. About 45% of African Americans own a home, down from about 50% of its 2004 peak. By comparison, about 74 percent of white Americans now own a home, a decrease of about 2 percentage points from its 2004 peak. 

Rising home prices and affordability issues "may contribute to widening the gap in access to home ownership," Tucker said. For example, existing homeowners are ready to buy another home because the property is likely to be valued during a pandemic, and more can be used to buy a new home. Provides fairness. 

The good news is that the market has simply cooled from "red heat" to "red heat," Zillow said. For example, house prices rose by 1.75% in August, up from almost 2% in July, according to real estate companies. 

"Buyers don't feel a bit enthusiastic because there are several other options for [in stock]," Tucker said. "Housing takes a day or two longer to be put on hold. These are some early signs that the market is returning to normal."