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It Was Less Affordable to Buy a Home in June in the U.S. Than It’s Been in 33 Years

Derek Saul wrote . . . . . . . . .

The National Association of Realtors’ housing affordability index, calculated using median single-family home prices, mortgage rates and median family incomes, hit 98.5 in June, a 3.6% decrease from May and 32.2% decrease since June 2021.

This is the worst monthly score on the index since 1989, according to the Wall Street Journal.

The median sale price of a single-family home rose to $423,300 in June, according to the association, an all-time high and a $7,900 increase from May.

Houses are the least affordable in the West, with a 69.6 score on the index, followed by the South (99.3), Northeast (102.3) and Midwest (132.3).

CONTRA

Declining mortgage rates may soon help improve affordability: the 30-year fixed mortgage rate is 5.22% this week, down 59 basis points from June’s peak. Rates could fall to as low as 4.5% by the end of 2022, Bank of America said in a note last week, a welcome break for home buyers.

KEY BACKGROUND

Housing prices exploded since the beginning of the Covid-19 pandemic: The average price of a house rose from $383,000 in the first quarter of 2020 to $525,000 in the second quarter of 2022, a 37% increase, according to the St. Louis Federal Reserve. Declining housing affordability has coincided with the highest inflation levels in over 40 years, though the rise in consumer prices slowed in July. New home sales have plunged in recent months, contributing to fears of a housing market collapse, though a jump in mortgage applications last week provided a glimmer of hope.


Source : Forbes

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