"During the pandemic, millions of Americans broke into the housing market thanks to sub-3% mortgage rates. But as mortgage rates and home prices started to climb-and while wages remained relatively stagnant-achieving the American dream feels further out of reach than ever. Indeed, the average age of a first-time home buyer climbed to an all-time high of 40 years, according to the National Association of Realtors."
""The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory," Jessica Lautz, NAR deputy chief economist and vice president of research, said in a statement. "The share of first-time buyers in the market has contracted by 50% since 2007-right before the Great Recession.""
"According to Realtor.com data shared with Fortune, at least one of three things would need to happen: mortgage rates would need to fall to 2.65%; median household income would need to rise by 56%; or home prices would need to decline by 35%."
During the pandemic, sub-3% mortgage rates enabled millions of Americans to enter the housing market. Rising mortgage rates and climbing home prices, paired with relatively stagnant wages, have reduced affordability and increased the average age of first-time buyers to 40. The share of first-time buyers has contracted by 50% since 2007. Realtor.com analysis finds that affordability would require one of three changes: mortgage rates falling to 2.65%, median household income rising by 56%, or home prices dropping by 35%. Current conditions—about a 6.15% mortgage rate, median income of $84,763, and median home price of $418,000—fall far short of those thresholds.
Read at Fortune
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