Home prices in the Greater Boston area have skyrocketed over the last few years, and that’s Exponentially worsens during a pandemic..
However, the discovery of new research on how much money you need to make to buy a home locally these days may still shock you.
A new report on the condition of homes in the United States According to the Harvard Housing Research Joint Center, buying a median home in the Boston metropolitan area requires earning more than $ 181,000 a year.
Estimates assume that a 30-year fixed-rate mortgage has a down payment of 3.5% and that buyers spend less than 31% of their income on mortgage payments. It also works on a median home as worth $ 659,161.
The report comes a year after the explosive home prices.according to National Real Estate Agents AssociationIn the first quarter of 2022, home prices rose almost 16% year-on-year nationwide.
In Massachusetts Reported by WBURThe rise in house prices is still extreme, but not so dramatic. House prices in the state in April 2022 are reported to have risen almost 10% year-on-year.
“If you’re a homeowner, you’ve won the lottery, otherwise you’ve been locked out for a long time,” said Chris Herbert, managing director of the Harvard Housing Research Co-Center. .. Boston Globe Wednesday.
Things can get worse for homebuyers as the Federal Reserve Raise interest rates..according to New York TimesSince the Fed raised interest rates earlier this month, average mortgage rates have already risen by 2 percent. This is in stark contrast to the very low mortgage rates, which remained around 3% last year.
“Changes in mortgage rates have actually doubled the impact of price increases across the pandemic on affordability,” said Jeff Tucker, senior economist at housing website Zillow. Gloves..
“Overall, it has produced an absolutely extraordinary increase in the cost of home ownership. The monthly cost of mortgage payments is astronomical over the past year if a combination of higher prices and higher interest rates is adopted. It’s rising. “
In Greater Boston, a Harvard University report states that white households are more likely to own about twice as many homes as black and Hispanic households. As a result, exponential growth in home prices is exacerbating the racial wealth gap, he says.
Homebuyers looking to take advantage of record low interest rates have been a major source of unrealistic demand for homes since the outbreak of the pandemic. Tucker said Gloves “Many people were able to get the numbers to work even by buying a home that they previously thought was affordable.”
Home prices can fall as more buyers are able to bid from the market due to higher mortgage rates. Gloves As reported, experts say housing supply is still low in our area, as it has been going on for years.
Experts are trying to figure out what will happen in the home buying market in the coming months as mortgage rate hikes take place.