The US housing market is so expensive that incomes would have to spike 55% for it to be considered affordable, industry exec says
The US housing market is so expensive that incomes would have to spike 55% for it to be considered affordable, industry exec says
To hit pre-pandemic affordability, either US incomes must spike, home prices have to crash 35%, or mortgage rates must come down.
The prices are secondary. Why is there a shortage of housing?
I think it depends on the place but one observation is to notice what builders are choosing to build. In my area at least the majority of new construction is either cramped subdivisions with $600K+ homes, luxury apartments, or 55+ maintenance provided housing. All of these categories are not what the general populace is looking for, especially first time buyers or new entrants to the market. But I'm guessing the margins on these properties and rentals are much higher.
I think developers don't want to waste their efforts on affordable rentals or starter homes. They have block of land X, so they figure they can get Y% more return by building properties with rents in the top quartile for the area.
Yes. Now offer more land and the right to use prefabricated elements. Then somebody will figure out a way to create housing with low margins.
Permanently Deleted
Maybe for a few years, it took about 7 years for almost all the country to get back above 2008 prices.
Permanently Deleted
This is an average including the most expensive areas of the county. Homes are still very affordable in areas like the Midwest (under $200k and sometimes under $100k).
You mean the houses that use to be $75-150K with a 3% interest are now $100-200K at 8% interest? Your so right very affordable what a deal!
I hope those people living in the Midwest making 40K a year got their income bumped up to 60-70K a year so they could afford the new housing market.
The issue is housing is going up faster then income.
I hope those people living in the Midwest making 40K a year got their income bumped up to 60-70K a year so they could afford the new housing market.
That's the real rub with these studies that use national averages. It's not affordable for anyone, anywhere - unless you're blessed with a remote job paying HCOL money and don't mind moving somewhere where the nearest doctor is an hour away and the local past time is fentanyl and larceny.
No the fuck they are not! I am tired of idiots saying this. I live in the Midwest and I assure you that they are not. We have too many people moving in from the coasts buying sight unseen and causing our prices to sky rocket. And our rents aren't any better. Kansas City, MO had the highest rent hike in the country. Our cost of living is getting closer to that of the coast but our pay is not.
My job brought me to Indiana last year from Denver. I thought I might be able to afford a home here. Nope. I'm paying the same in rent for older apartments. The homes face the same pricing issues as the rest of the country. Additionally, as you mentioned, folks are coming in with cash over the asking price. The whole thing is fucked.
But then there's the downside: you have to live in the midwest.
I rather just lay down and die.
They have to be affordable for the local population as well, not just an average income. Incomes in places with lower cost housing are lower, too, so raw numbers aren't meaningful.
I feel like generally the data shows the situation better if people use median instead of mean.
But perhaps a measure of "median income in region (incl unemployed/underemployed people)" compared to "median house price in region". Not much point in moving to cheap town if you can't find work there, and is that worth uprooting all your communities and social support networks?
For house prices, it would be better to just exclude the areas that are classified as high cost by Fannie and Freddie.