The economic boom, which has continued for a decade, has not improved the housing situation for the average American in 2020, CBS News writes.
According to Attom Data Solutions, a real estate research firm in the fourth quarter, people with average wages cannot afford to buy a home in 344 of 486 counties, or 71% of the United States. This is a slight improvement compared to 73% in the third quarter and 75% a year earlier, the Attom report said.
One reason for the improvement? A booming real estate market amid falling mortgage rates.
Housing prices rose by 9% compared to the same period last year for the last three months of 2019, which makes the вЂњtypical homeвЂќ financially unbearable for those who receive average wages, вЂќ said Todd Theta, director of product at Attom.
In order to overpower the current national average housing price of $ 257,000, homebuyers need an income of $ 67,647, the report said, but the average annual salary in the US was $58,214, the report said.
Although homes have вЂњactually been a bit more affordableвЂќ in recent months, prices are expected to rise вЂњin the near future,вЂќ Theta said.
Another analysis by the Zillow real estate site shows that in 2020, the cost of housing will increase by about 2.2%.
One reason is the вЂњunderestimationвЂќ of the new housing stock due to higher labor and land costs, the National Association of Homebuilders said in a statement.
This is despite the fact that real estate markets continue to improve throughout the country, and confidence in most US markets remains at 20-year highs, said NAHB chief economist Robert Ditz in a statement.
A steady decrease in the 30-year mortgage rate to 3.8% last month from 4.9% just a year ago stimulates demand, which is facilitated by a reduction in lending rates by the Federal Reserve during 2019.
Lower loan rates mean that financing a 30-year mortgage is cheaper. Lower financing costs can help buyers cope with higher prices.
Sales of newly built homes rose 1.3% in November. This is a sign that a decrease in mortgage rates this year is driving purchases and higher prices. Sales of existing homes fell 1.7% last month, which is considered a sign of a decrease in supply rather than a decrease in demand. Taken together, the numbers show that there are not enough homes on the market at prices low enough to meet growing demand.
Rent is also rising
To a large extent, the inaccessibility of buying houses is considered one of the reasons why the number of tenants has doubled compared to the fact that they bought houses during the decade after the collapse of the housing and the Great Recession, up to 9.1% compared with 4.3%, according to a recent analysis from RentCafe.
RentCafe found that about 34% of Americans вЂ” or more than 100 million people вЂ” rent, which is the largest part of the US population since the 1960s. But renting does not get cheaper either.
According to RentCafe, the average rent over the past 10 years has grown to $1,473, or $390, or 36%. This is faster than average income growth вЂ” up to 27% over the past decade.
The number of homeless people in the country is also growing, increasing by 2.7%, as the Associated Press recently reported, citing annual data from the United States Department of Housing and Urban Development since January 2019.