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More People Are Counting on This to be Able to Buy a Home

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With home prices and mortgage rates soaring over the last year, it’s no surprise that homes are no longer affordable for many would-be buyers.

Median existing home sales reached $416,000 in June, up 13.4% year-over-year. According to the National Association of Realtors (NAR) This is the 124th straight month of year-over-year growth and the longest on record.

And 30-year fixed mortgage rates averaged 5.22% in the week ending August 11, up from 2.87% a year ago. According to Freddie Mac.

“Housing prices are rising far faster than wages, especially for low- and middle-income workers.” NAR Chief Economist Lawrence Yun said: in a statement.

affordable data

As for affordability figures, monthly mortgage payments for a typical existing single-family home with a 20% down payment jumped to $1,841 in the second quarter, the NAR said.

That’s an increase of $444 (32%) from the first quarter of this year and $612 (50%) from a year ago. Families typically spend 24.3% of their income on mortgage payments, up from 18.7% in the first quarter and 16.9% in the same period last year.

It’s a tough time for first-time buyers. For a typical starter home worth $351,500, with a 10% down payment, monthly mortgage payments increased to $1,810 in Q2, an increase of $433 (or 31%) from Q1 Did. It’s also up $597 (or 49%) year over year.

First-time homebuyers typically spend 36.8% of their family income on mortgage payments, up from 28.7% in Q1. According to the NAR, a mortgage is considered unaffordable if the monthly payments (principal and interest) exceed 25% of the family’s income.

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silver lining

On the bright side, home price gains have slowed a bit and home sales are declining, “giving prospective buyers a welcome bit of relief,” Yun said. said.

Median existing home prices were up 14.2% in the second quarter from the same period last year. This is slightly slower than his 15.4% increase in the first quarter. Existing home sales fell to his lowest in two years in June.

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Additionally, “the recent drop in mortgage rates will bring more buyers to the market, especially where housing prices are still relatively affordable and jobs are being added,” Yoon said.

The 30-year fixed mortgage rate stood at 5.22% on Aug 11, down from 5.54% for the week ended Jul 21.

In other real estate news, 78% of Americans expect the housing market to crash. Consumer Affairs Agency research, consumer information services. You might be surprised, but 63% of those surveyed want their homes to collapse.

Perhaps that’s because 75% of respondents said they plan to buy a home if the market crashes. On average, they say he spends $29,504 to buy one.

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