99% Of Homes In the US Are Unaffordable To Average Americans

Mortgage rates have risen dramatically, pushing home ownership out of reach for millions of Americans struggling to make ends meet. According to the research, the newest development continues a two-year pattern of rising difficulty in becoming a homeowner for average U.S. income earners.

The national median household income is $71,214, making it unaffordable to purchase a home in 99 percent of the 572 counties in the United States assessed by real estate data source ATTOM.

As housing prices and mortgage rates rose in the third quarter, the affordability crisis worsened nationwide. The usual proportion of average national salaries needed for primary housing expenses has climbed to 35%.

According to the research, the most recent figure is unaffordable since it exceeds the generally accepted debt-to-income ratio of 28%. It’s the highest percentage seen since 2007 and significantly higher than the 21% recorded in early 2021 when mortgage rates began their meteoric rise.

Mortgage rates went beyond 7% for the first time in nearly 20 years due to the Federal Reserve’s aggressive rate hikes. Interest rates have remained stubbornly high since late September when they hit a record 23-year high.

According to Freddie Mac, the average rate for a 30-year fixed loan rose 7.31 percent last week. Compared to the low rates of 3% during the pandemic, this is a significant increase over the previous year’s rate of 5.89%.

Home prices have stayed reasonably steady over the previous three years despite a substantial increase in borrowing rates. The shortage of available dwellings is a primary contributor to this situation. Prospective purchasers have fewer options because sellers who locked in a low mortgage rate before the outbreak are reluctant to sell.

More than nine percent fewer properties were on the market at the end of July compared to the same time in 2018, and about half as many were available as before the COVID-19 pandemic hit in 2020.

Consumer demand has surged due to the housing shortage, driving up costs. As of the end of August, the national median existing-home price had risen to $407,100, an increase of 3.9% year-over-year, as the National Association of Realtors reported.