Homeownership slipping out of reach for Americans in most counties: report

A sign is displayed outside a home in Wheeling, Ill., Thursday, May 5, 2022. Average long-term U.S. mortgage rates made their biggest one-week jump in 35 years, one day after the Federal Reserve raised its key rate by three-quarters of a point in bid to tame high inflation. Mortgage buyer Freddie Mac reported Thursday, June 16, that the 30-year rate climbed from 5.23% last week to 5.78% this week, the highest its been since November of 2008 during the housing crisis. (AP Photo/Nam Y. Huh)

New data is showing that homeownership is slipping out of reach for many Americans.

Rising home prices and mortgage rates above 5 percent are making houses less affordable in nearly every county in the country, according to real estate data company ATTOM.

“Median-priced single-family homes and condos are less affordable in the second quarter of 2022 compared to historical averages in 97 percent of counties across the nation with enough data to analyze. That was up from 69 percent of counties that were historically less affordable in 2021,” the company said in a Thursday statement summarizing their latest report.

The report said the last time affordability metrics were this low was in 2007, just prior to the crash of the housing market in 2008. The crash was driven by the failure of the mortgage-backed securities market, which itself was part of broader predatory lending practices enabled by Wall Street. 

Those crashes eventually led to the collapse of the U.S. financial system, which had to be bailed out by U.S. taxpayers as part of the Troubled Assets Relief Program that sped through Congress in 2008.

“Median home prices in 560 of the 575 counties analyzed in the second quarter of 2022 are less affordable than in the past. The latest number is up from 459 of the same group of counties in the first quarter of 2022, 397 in the second quarter of 2021 and just 251, or less than half, two years ago,” the report from ATTOM said.

The portion of paychecks that people are spending on things like mortgages is also going up. Home-ownership expenses now constitute 31.5 percent of wages and are rising at the fastest rate since at least 2000.

Lawmakers are calling attention to the fact that there is a serious shortage of housing across the U.S. and are considering a variety of tax credits to get builders to construct more units. They argue that this will help to drive down prices.

At a meeting of the Senate Finance Committee on Wednesday, Sen. Maria Cantwell (D-Wash.) said that the housing supply issue couldn’t be overstated.

“I feel like painting a big supply … message across … maybe one of the avenues out here: ‘It’s just supply.’ Or, ‘It’s just supply, stupid.’ I don’t know what you get about it, it’s really just about supply.”

However, the Federal Reserve is expected to continue raising interest rates throughout the year, making it more costly for financial institutions to borrow money from one another. This could continue to drive mortgage rates up, further increasing home-ownership costs for Americans.

Tags contruction Home ownership housing shortage housing supply Maria Cantwell mortgage

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