Thursday, September 22, 2022
Homeownership is moving from the American dream to the golden ticket.
The numbers are staggering. For homebuyers, especially first-time buyers, the obstacles stack up.
Kim Marion, Rhode Island’s top real estate agent, spoke to GoLocal LIVE Wednesday about the impact of rising interest rates on monthly mortgage payments.
“Last year at this time, the average mortgage was about $1,265. This year, the average mortgage is $1,944. That’s a 53% increase. It’s like adding a luxury car to your payment, I didn’t get the car, $674 a month difference, just think about it,” said Marion of Mott & Chace Sotheby’s International.
Marion’s data is based on 30-year fixed mortgage rates jumping from less than 3% last year to more than 6% today.
That doesn’t take into account another 75 basis point increase announced by the Federal Reserve on Wednesday. This is expected to further increase borrowing costs.
In many countries, housing prices are falling. But in Rhode Island, homebuyers have no peace of mind. The average price of a single-family home remains at $405,000, according to released data.
Low in stock
“Sales activity continued to decline for the seventh consecutive month, down 11.4% from 12 months ago. The number of days homes were on the market remained unchanged at 29, as was the 1.8-month supply of inventory. “This is still well below that of a balanced market indicated by a six-month supply of available homes,” the RI Realty Association said Wednesday.
“Inventory has increased slightly, but options are still very sparse. And higher mortgage rates are reducing the number of buyers in the market. Securing stable housing payments through ownership, and in doing so, the opportunity to build wealth through equity may be an option, or if you’re waiting for prices to drop significantly, still Given the ongoing housing shortage, we need to be aware that that won’t happen anytime soon,” said Agueda del Borgo, president of the Rhode Island Real Estate Association. .
The median price for condos sold in August rose 15.6% from 12 months ago to $313,338, making it a much more affordable entry point for those struggling to own a home. The number of days apartments were on the market fell from 32 to 27 August 2021, with sales down 17.7%.
At $424,500, the median multifamily unit price remains the highest among the three sectors, largely driven by demand from investors looking to capitalize on rising rents. Days on the market fell 13.8% from 29 in August 2021 to 25, and closed sales fell 10.8%.
“Over the past five years, the median cost of multifamily homes has increased 93%, compared to 56% for single-family homes and 42% for condos. As long as they continue to rise and exceed the cost of ownership, they will continue to do so,” said Del Borgo.
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