"Much of the public discourse around housing affordability centers on interest rates. The Federal Reserve's decisions dominate headlines, and many believe that lower rates are the silver bullet to unlock homeownership for first-time buyers. But that's a fallacy. While rate reductions can stimulate the economy and encourage refinancing, they alone won't solve the affordability crisis. Home prices have surged in recent years some markets seeing double-digit increases annually."
"Let's break it down. If you want to buy a typical home priced at $426,000, you'd need to earn around $105,500 a year and have about $85,000 saved for a down payment, not including moving costs or closing fees. Sure, there are lower down payment options, but they come with higher monthly payments and require an even higher income around $127,800. That's a tough hurdle for many first-time buyers."
National median home price now exceeds $426,000, shifting many Americans' goal from owning a traditional home to finding affordable shelter. Interest rates dominate public attention but represent only one factor in affordability. Rate reductions can stimulate the economy and encourage refinancing, yet they do not resolve the underlying affordability crisis. Home prices have surged and property taxes are beginning to rise, adding costs. Temporary rate dips produced short-lived rallies, and overheated markets led sellers to lower prices while buyers pulled back amid stagnant wages. Typical purchase requires roughly $105,500 income and $85,000 down; lower-down options raise monthly costs and needed income to about $127,800.
Read at www.housingwire.com
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