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.
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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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.
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.