The cost of buying a new house just hit a fresh record as mortgage rates rose to the highest level this year. Findings from Redfin show the combination of steep mortgage rates and elevated home prices has pushed the median monthly housing payment to a record $2775- an 11% increase from the same time last year. There are a number of driving forces behind the affordability crisis. Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials. Higher mortgage rates over the past three years have created a "golden handcuff" effect in the housing market. Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further and leaving few options for eager would-be buyers.
5 comments:
What are the implications for both prospective buyers and sellers in the housing market, and how do interest rates affect this situation?
Do you think we will see a resurgence of new home builders because demand is so high, even though the construction materials are expensive? In my opinion, at some point, the cost of homes is so high that I would think building homes would become very profitable.
do you think we could be going towards another housing crisis and how similar would it be to the one in 2008?
With the supply of housing being a prevalent issue, I wonder if policy makers will make building housing in urban areas more attractive without dramatically raising the cost of living for the local people. I feel as though I see many new suburban homes being built all over the country, but not many urban options.
This is very interesting and something all of us could become affected with here soon when we start trying to buy homes and enter into the housing market. We already see it today but news like this makes it even more in the fore front that our generation will be forced to rent much more and longer then previous generations.
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