Housing Is Less Affordable Now Than at the Peak of the 2008 Housing BubbleNew data found that the average American would need to spend 42.9% of their income to afford a median-priced house.
Although the housing market has shown signs ofcooling in certain areasafter all-time highs throughout 2022, new data has found that housing affordability is still a widespread issue for Americans.
According to theAtlanta Fed's Housing Affordability Monitor, housing affordability is worse today than it was more than a decade ago during the housing bubble of 2008. As of December 2022, the average American household would need to spend 42.9% of its income to afford a median-priced home. This marks a new high since August 2006, when it was 41.1%. The data also found that affordability declined 24% year-over-year.
The steep decline in housing affordability could be the result of ongoing high prices for housing coupled with rising mortgage rates. When thehousing marketboomed during the pandemic into 2021 and much of 2022, home prices reached record highs across the country.
Over the past year, as prices began to box out millions ofwould-be buyers和美联储提高利率,最终需求began to slow. Still, despite the decline in home prices, housing affordability is at an all-time low, and the total value of American homes is still up 6.5% from the same period a year ago, according to the data. Althoughmortgage ratesare high, they're notas highas they were at the peak of November 2022 at 7.08%, so the slight decline sparked a minor uptick in homebuyers at the beginning of 2023, demonstrating just how competitive the housing market still is.
Related:Declining Mortgage Rates Spark Uptick in Interest from Would-Be Homebuyers
For those looking to buy a home, it might be wise to wait it out for a few more months.
