See The Math for Buying a Home No Longer Works. These Charts Show You Why.: What does it take to buy a home in the U.S.? A lot more than it did before the Federal Reserve raised interest rates by Gina Heeb of The WSJ. Excerpts:
"Typically, high mortgage rates slow down home sales, and home prices should soften as a result. Not this time. Home sales are certainly falling, but prices are still rising—there just aren’t enough homes to go around. The national median existing-home price rose to about $392,000 in October, the highest ever for that month in data that goes back to 1999."
"Before the Fed started raising rates, a person with a monthly housing budget of $2,000 could have bought a home valued at more than $400,000. Today, that same buyer would need to find a home valued at $295,000 or less."
"Rents are on the rise, but the cost of buying a home has risen by a lot more. The average monthly new mortgage payment is 52% higher in the U.S. than the average apartment rent, according to an analysis by CBRE. The premium is even sharper in many major metro areas—including 175% or more in Seattle and Austin, Texas, and several cities in California."
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