Middle-Class Squeezed Out of Housing Market Due to Soaring Prices and Rates
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Middle-class families are being priced out of the housing market due to high mortgage rates and home prices. 75% of homes for sale are now unaffordable for the middle class.
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Homeownership builds wealth over time through equity and forced savings from mortgage payments. But current conditions make buying extremely difficult for median income earners.
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The median home price is $431,000 while median income families can only afford a $256,000 home. Competition for limited inventory further raises prices.
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Added costs like rising insurance premiums due to climate change also make affording a home more difficult. Mortgage rates may fall in 2024-2025 but likely not to early pandemic lows.
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Solving the crisis requires building at least 4 million more affordable homes. Buyers must accept higher rates as the new normal and seek creative ways to buy like down payment assistance programs.