#Bidenomics: House Buying Costs Hit Record High

A sign is displayed in front of a new housing development in Burke, Virginia, on April 26, 2022. - Sales of new homes fell in the US last month, government data said on April 26, as high prices continued to crimp demand. Sales dropped to an annualized rate of 763,000, seasonally adjusted, less than analysts anticipated and 8.6 percent below the rate in February, which was revised sharply upwards, the Commerce Department reported. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)

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.