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American house slaves are also tired! House price affordability fell to the lowest in ten years

June 26, 2018 07:59
Author: Anya
source: Eastern Fortune Network

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For the domestic people, high housing prices are always the biggest "heart disease", but this situation is equally bad in the United States. With house prices and loansinterest rateThe higher the rate, the greater the pressure on Americans to raise their homes.

According to a recent report on residential affordability released by data provider ATTOM Data Solutions, in the second quarter of this year, the US residential affordability index fell to 95 from 102 in the previous quarter, the lowest level since the third quarter of 2008.

The housing affordability here refers to the percentage of total income required to purchase a medium-priced house relative to the historical average. If the housing affordability index exceeds 100, it means that the house price is cheaper for the people; if the index is less than 100, it means that the house price is more expensive for the people.

The report pointed out that currently the US wage earners need to spend 31.2% of their income to support a mid-priced house, which is higher than the historical average of 29.6%. Mid-sized housing prices in the United States reached $240,000 in the second quarter, up 4.7% from the same period last year.

The chart below shows the change in the median price of existing homes in the United States in the past four years:

(Source: National Real Estate Association official website)

In fact, since the bottom of the first quarter of 2012, the price of medium-sized houses in the United States has risen by 75%, while the average weekly wage increase of US residents has only 13%.

In addition to rising housing prices, loansinterest rateThe sharp rise has also brought more pressure on American house slaves. Data show that the US average 30-year fixed-rate mortgage rate rose to 4.61% in May, the highest level since 2011, which increased the pressure on first-time buyers.

This year's mortgage interest rate has risen faster than many economists expected, mainly because of the acceleration of US economic growth, the prospect of rising wages, and the surge in commodity prices, which has caused inflation concerns.

In the context of rising house prices far exceeding wage increases and rising lending rates, about 75% of the current wage earners cannot afford mid-priced houses. According to the specific city, Marin County in the San Francisco Bay Area has the worst housing affordability, where buyers need to spend 133% of their income to buy a medium-priced house. In Detroit, Michigan, buyers only need to pay 14% of their income to buy.

                (Editor: DF207)

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