Back to posts

It Keeps Getting Worse!

July 3, 2024 | Posted in: Wealth Strategies

I have written a number of blogs regarding the difficulty that younger people have in entering the housing market because of high home prices and interest rates. Well, real estate data source Attom Data Solutions just reported that home affordability reached the lowest level since 2007 in the second quarter. Mortgage payments, taxes, and insurance costs now consume 35.1% of average income up from 32.1% a year earlier. Financial planners generally use 28% as a guideline for affordability. Even worse, ownership costs totaled 43% of income in about one third of US markets. While particularly acute in some markets in the West and Northeast, Attom found that 98.8% of counties surveyed were less affordable than their historical average.

The primary problem is that there is a national shortage of supply due to a variety of factors including supply chain problems, demand for homes by institutional investors, caution on the part of builders, restrictive zoning laws, and high interest rates which deter existing homeowners from selling.