Posted on 08/26/2023 12:22:19 PM PDT by Kaiser8408a
As Robert Palmer nearly sang, US housing is simply unaffordable.
If we look at the Case-Shiller National home price index against real weekly wage growth, you can see the problem clearly. Since Covid and The Fed’s overreaction by providing staggering monetary stimulus, home prices shot up while real median weekly earnings collapsed.
Buying a house requires a much bigger slice of people’s income now — making this the most unaffordable housing market since 1984, by one measure.
And that crushing lack of affordability isn’t expected to improve much in the near future.
In just the last few weeks, US home prices rose for the first time in months and the 30-year fixed mortgage rate hit a 22-year high of 7.23%.
That has made what was already a dismal affordability picture even worse.
At today’s rates, buying a median-priced home would require a monthly principal and interest payment of $2,440 for those making a 20% down payment, according to Black Knight, a mortgage technology and data provider.
That’s $1,172 a month more in mortgage payments from just two years ago, before the Federal Reserve raised its benchmark lending rate 11 times in 18 months, Black Knight found. It’s a 92% increase — and is taking a growing chunk out of household budgets already facing inflation on many fronts.
Currently, 38.6% of the median household income is required to make the monthly payment on the average home purchase, making housing the least affordable it’s been since 1984, according to Black Knight.
Must as well face it, we’re addicted to gov. Or at least Fed monetary stimulus.
Just look at Personal Interest payments under Bidenomics.
The themesong for Bidenomics should be “Let’s Go Crazy” with spending … on green donors!
Biden and Powell probably sing “Hurt so good!”
(Excerpt) Read more at confoundedinterest.net ...
I'm waiting for the stories of people who have adjustable rate mortgages (ARMs) whose rates have gone up to the point where they can't pay their mortgage anymore.
-PJ
The Disastrous Joe Biden Administration continues apace
Biden is just having to deal with the hand that Trump dealt him. /s
Bidenomics kicks in in 3,.....2,.....
In toronto, Canada's largest city the average house price is now $1.2 million.
The income to qualify for a mortgage is $222,000, which is above the 90th percentile of household incomes.
That is, not all of the top 10% of household incomesin Toronto can afford to buy a house.
Oh, and Trudea la tapette is bringing in one million new immigrants this year (US equivalent would be 10 million)
Keep voting Liberal, dumb Canucks ! It is working great !
True. In Vancouver there are “students” who are buying multi-million dollar homes because their parents are the elite of China, Taiwan and Hong Kong looking for a safe haven if things go south.
Income levels for them don’t matter, because they are buying out of wealth.
Same in Toronto, to a lesser extent.
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