"Even more striking, in several high-cost coastal metros, not even a 0% mortgage rate would make the median-priced local home affordable for a household earning the local median income. This includes New York, Los Angeles, Miami, San Francisco, San Diego, and San Jose, where taxes, insurance, and maintenance on a median-priced home alone can often consume more than 10% of a median household's income."
"On the flip side, Zillow finds that mortgage rates are already low enough for median-income buyers in many Midwestern markets to afford the median-priced home in those areas. Keep in mind, this is back-of-the-envelope math. The mortgage rate scenarios above assume all else is equal-and that lower rates don't impact home prices. Are we likely to see an average 30-year fixed mortgage rate of 4.43% anytime soon?"
Median-income U.S. homebuyers would need a mortgage rate near 4.43% and a 20% down payment to comfortably afford the median-priced U.S. home. Many first-time buyers cannot make a 20% down payment. Several high-cost coastal metros, including New York, Los Angeles, Miami, San Francisco, San Diego, and San Jose, remain unaffordable even at a 0% mortgage rate due to taxes, insurance, and maintenance consuming substantial shares of median household income. In many Midwestern markets, current mortgage rates allow median-income buyers to afford median-priced homes. The rate scenarios assume all else equal and that lower rates do not affect home prices.
Read at Boston Condos For Sale Ford Realty
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