Housing Market Freezing as Homes Become Unaffordable for Many Due to High Prices, Rising Rates, and Flat Wages

Mortgage applications are being denied at historic rates due to insufficient income, a sign that housing market liquidity is freezing up.

Home prices have surged 40% in 3 years while wages remain flat, making housing unaffordable. The median household would need to spend 43.8% of income to afford a home.

Rent is also increasingly unaffordable, with rent-to-income ratio hitting 40% amid high inflation.

The Federal Reserve's pandemic money printing caused high inflation, which led the Fed to aggressively raise interest rates, reducing home affordability.

Either housing market freezes and crashes or prices fall slowly, but either way inflation erodes purchasing power. Consider diversifying savings with gold/silver.