By Jorge Vazquez
05 Oct 2023, 10:41 AM EDT
ATTOM, the real estate data site, released its Q3 2023 U.S. Housing Affordability Report, showing that median-priced single-family homes and condos are less affordable compared to historical averages by 99%. from counties across the country.
The report shows that the typical portion of average wages required for major homeownership expenses has been raised by up to 35%.
The figure is considered unaffordable by common lending standards, which require a debt-to-income ratio of 28%. This marks the highest level since 2007 and is well above the 21% figure from early 2021, just before mortgage rates began to skyrocket from record lows.
“Homeownership continues to become increasingly difficult for buyers, as average 30-year mortgage rates in the US have risen above 7%, from less than 3% in 2021, and mortgage prices housing has increased again in the third quarter of this year,” says the report.
And he adds: “The national median price of single-family homes and condominiums increased 2% compared to the second quarter, to a new record of $351,250. “Typical values across the country have risen for two consecutive quarters, from a decline that lasted from mid-2022 to early 2023 and threatened to end the extended boom that has fueled the U.S. housing market for 11 straight years.”
Those latest price and interest rate increases, along with other forces, continue to raise the typical cost of major property expenses much faster than wages, resulting in lower housing affordability.
“The dynamics influencing the U.S. housing market appear to continually work against ordinary Americans, potentially to the point that they could begin to have a significant impact on home prices,” said Rob Barber. , executive director of ATTOM.
“We are clearly not there yet, as the market continues to rise and the slowdown we saw last year increasingly looks like a temporary pause. But with basic homeownership now absorbing more than a third of the average salary, the stage is set for some potential buyers to be priced out, reducing demand and upward pressure on prices. We will see how this plays out as the 2023 peak shopping season comes to an end,” Barber added.
Among the 578 counties analyzed, 574, or 99%, are less affordable in the third quarter of 2023 than their historical affordability averages. That’s higher than the 96% level a year ago and well above the 48% in the third quarter of 2021. Historical rates have worsened quarterly in 94% of those counties, pushing the national rate to its lowest. lowest point since 2007.
For more details about the report and its methodology, go here.
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