Chris O'Shea
According to a new report, many homeowners couldn’t even afford their own homes at current prices. It’s a troubling finding, as it shows just how difficult it has become to afford a home.
New Report
The survey found that 38 percent of homeowners who have owned their houses for at least 5 years said they couldn’t afford the home at current pricing. Indeed, homes have become quite expensive.
In 2019, the median sale price of a home was $313,000. At the end of 2023, the median price had jumped by more than $100,000, to $417,700. The median monthly mortgage payment has also increased. It is now $2,775, up 11 percent compared to just last year.
Reasons for Price Increases
One of the main reasons homeowners claim that they can’t afford current prices is higher interest rates. The current average interest rate on a 30-year fixed-rate loan is about 7 percent. That’s the highest average so far this year.
Increased Inventory
The good news is that home inventory has been rising, while buyers have been scared off by rising prices. The higher inventory combined with less demand should cool home prices down soon, hopefully.
Do One Thing: If you can, wait for home prices (and interest rates) to drop. It’s not a good idea to buy a home that you can’t afford. Or to buy a home that is so expensive you can’t afford anything else.
Jean Chatzky
