Purchasing a home, which has long been an integral part of the American Dream, continues to grow more and more out of reach for the majority of Americans, as home-buying costs just reached yet another record high.
For young people like me, even renting has become nearly unaffordable, and buying a home is largely out of the question. But even older people might find their home-owning dreams fading. Mortgage rates just spiked again, according to Fox Business, on April 19, reaching the highest level yet for this year.
“Market conditions for homebuyers remain challenging with few homes listed and costs for ownership still climbing,” commented Ben Ayers, Nationwide senior economist, per Fox Business. “Despite strong fundamentals for demand from demographics and a strong labor market, many first-time buyers are being shut out of the market by elevated financing rates and rising prices.” From Fox:
Findings from Redfin show the combination of steep mortgage rates and elevated home prices has pushed the median monthly housing payment to a record $2,775 – an 11% increase from the same time last year.
Fox identified several reasons for the increase. Underbuilding and owners’ reluctance to sell post-pandemic are two, but of course increasing mortgage rates and the rising costs of materials for construction also contribute significantly to the issue. Economists predict continued high mortgage rates throughout the first half of 2024, with falling rates after Federal Reserve cuts, Fox explained. But the low rates during the Covid-19 pandemic are unlikely to come back again.
