The housing market grapples with a tangled dilemma as soaring mortgage rates clash with record-setting prices, hindering affordability and thwarting potential buyers. Despite escalating rents and persistent claims of unaffordability for younger generations, the median asking price per square foot continues its relentless ascent, exacerbating the affordability crisis.
The Rent versus Buy housing market arithmetic is a mess. Even with rents having zoomed since 2019, the 7.52% mortgage rate is so unaffordable that any potential buyer is stopped by a brick wall that is being fortified by another brick wall. pic.twitter.com/VsMh6Gzfrs
— Jeff Weniger (@JeffWeniger) April 26, 2024
Please stop w/ the nonsense that younger generations can't afford homes just b/c they're trying to buy excessively large dwellings – the median asking price per sqft continues setting records week after week, now at $223, up 25% in just 3 years while mortgage rates have tripled: pic.twitter.com/nL0Qh19i0C
— E.J. Antoni, Ph.D. (@RealEJAntoni) April 26, 2024
- Soaring Mortgage Rates:
- Average long-term US mortgage rates have been climbing for several weeks, reaching their highest levels in recent times.
- The average rate for a 30-year fixed-rate mortgage even topped 7% for the first time in 2024.
- These elevated rates are putting pressure on potential homebuyers.
- Record-Setting Prices:
- Persistently high home prices are exacerbating affordability challenges for buyers.
- The median U.S. home-sale price increased by 5% from a year earlier during the four weeks ending April 14, 2024, bringing it to $380,250—just $3,095 shy of June 2022’s all-time high.
- This relentless ascent in prices is making it difficult for many to enter the housing market.
- Affordability Crisis:
- The combination of high mortgage rates and prices has led to a record median monthly housing payment of $2,775, which is up 11% year over year.
- Despite escalating rents and claims of unaffordability, the housing market continues to grapple with this dilemma.
Sources:
www.msn.com/en-us/money/other/housing-market-slumps-as-mortgage-rates-top-7/ar-AA1nffDU