Economic boom in the decades has not improved the housing situation for the average American in 2020, writes CBS News.
According to research firm Attom Data Solutions, conducting research on real estate in the fourth quarter, person with average salary can’t afford to buy a house in 344 of 486 districts, or 71% of the United States. This is a slight improvement compared with 73% in the third quarter and 75 percent from a year earlier, the report said Attom.
One of the reasons for the improvement? Fast-paced real estate market amid the decline in mortgage interest rates.
Housing prices increased by 9% compared to the same period last year for the last three months of 2019, which makes the “typical house” financially backbreaking for those who receive the average wage,” said the report Todd Teta, Director of product Attom.
To master the current national average price for housing in 257 000 dollars, home buyers needed an income of 67 647 dollars, the report said, however, the average annual wage in the U.S. was 58 214 dollars, the report says.
Although in recent months the house “is actually a bit more accessible,” it is expected that prices will rise “in the near future,” said Theta.
Another analysis conducted by real estate website Zillow, shows that in 2020 the cost of housing will increase by about 2.2%.
One of the reasons is “underestimation” of new housing due to higher costs for labor and land, the statement of the National Association of home builders.
This despite the fact that real estate markets continue to improve across the country, and confidence in most U.S. markets remains at 20-year highs, said in its statement, the NAHB’s chief economist Robert Dietz.
The steady decline in 30-year mortgage rates to 3.8% last month from 4.9% a year ago to stimulate demand, which contributes to the reduction of interest rates on loans from the Federal reserve for 2019.
Lower lending rates mean that financing a 30-year mortgage is cheaper. Lower financing costs can help buyers to afford higher prices.
Sales of newly built homes rose 1.3% in November. This is evidence that the decline in mortgage interest rates this year contributes to higher purchases and higher prices. Sales of existing homes fell 1.7% last month, a sign of supply reduction, not demand reduction. Together the figures show that the market is not enough homes at prices low enough to meet the growing demand.
Rents are also growing
To a great extent the inaccessibility of buying houses is considered as one of the reasons why the number of tenants doubled compared to those that bought houses during the decade after the collapse of the housing and the great recession, to 9.1% compared to 4.3%, according to a recent analysis from RentCafe.
RentCafe found that about 34% of Americans — or more than 100 million people — rent that is the largest part of the US population since 1960-ies. But the rent is cheaper too, becomes.
According RentCafe, the average rent for the last 10 years has grown to 1 473 dollars, or $ 390, or 36%. It is faster than the average income — to 27% over the last decade.
The number of homeless in the country is also growing, having increased by 2.7%, as recently reported by the Associated Press, citing annual data from January 2019 to the Ministry of housing and urban development USA.