Buying a house is 𒉰costlier than anytime iওn at least the last decade, with property buyers hit with the double whammy of rising mortgage rates and home prices, according to real estate company Redfin.
Buying a house in the United States has become more expensive than it has been in at least the last decade, with homebuyers grappling with a perfect sto🌞rm of escalating mortgage rates and soaring property prices, reports real estate company Redfin.
According to Freddie Mac, the average interest rate on a fixed 30-year home loan ♈has surged to 7.1%, breaching the 7% mark for the first time this year. Simultaneo🎃usly, Redfin notes that the median asking price for homes across the U.S. has skyrocketed to a record $415,925 for the four weeks ending April 21.
Adding to the financial strain, the median sale price for homes in the U.S. has also reached an all-time high of $383,725 in April, marking a significant increase from the previous year. This surge in sale prices, combined with current mortgage rates, has propel🔜led the median mortgage payment to a record $2,843, up nearly 13% from last year.
While the current housing costs may seem historically high, it's worth noting that mortgage rates in the 1980s soared much higher, peaking at 18.6% in October 1981. However, home prices at that time were comparatively lower, eve🉐n when adjusted for inflation.
These elevated costs come at a challenging time for homebuyers during the spring home-buying season, traditionally a period of increased real estate activity. Despite an anticipated 9% increase in existing home purchases this year, many prospective buyers find themse꧟lves priced out of the market, particularly first-time homebuyers.
Lisa Sturtevant, Chief Economist at Bright MLS, highlighted the impact of elevated mortgage rates and high home prices on the spring market, noting that first-time𓆉 buyers are facing the toughest challenges.
Rising home prices have significantly outpaced income growth, making homeownership increasingly unattainable for the averag꧑e American. According to Zillow research, the h🎀ousehold income required to comfortably afford a typical home has surged from $59,000 to $106,500 in just four years.
One of the driving factors behind the surge in ꦇhome prices is the limited availability of properties for sale. Construction has failed to keep pace with housing demand, while many homeowners are reluctant to sell, holding onto mortgages sꦡecured at low rates during the pandemic.
Given the current market conditions, Redfin's economic research lead, Chen Zhao, advises both sellers and buyers to adjust their expectations. While sellers may be fetching top dollar for their properties, Zhao suggests pricing cಌompetitively to attract buyers amid stubbornly high morꦯtgage rates.
For serious buyers capable of meeting today's costs, Zhao recommends shopping for their dream home while acknowledging that ꦏthis year may not y💧ield dream deals. As the cost of homeownership continues to climb, navigating the housing market requires a careful balance of financial prudence and realistic expectations.
