Mortgages Now Take Largest Share of Income Since 1984 as Rates Rise and Home Prices Remain High
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Mortgage rates are lower today than in the 1980s, but home prices are much higher relative to income, so mortgages take a similar share of income.
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Ultra-low rates during the pandemic helped affordability, but rising rates and inflated prices have now made buying unaffordable for many.
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Even at 18% in 1981, mortgages took a smaller share of income than today because homes were more affordable.
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Prices rose so quickly in the pandemic that a monthly mortgage now takes over 40% of median income for the first time since 1984.
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To restore affordability, rates would need to fall significantly and/or prices decline substantially, which may be difficult in the near term.