Homebuyer affordability hits record low

Despite a tight housing market, average monthly mortgage payments for home purchases have risen in recent weeks There are signs of looseness.

Redfin said Thursday morning that payment volumes increased 10% annually in the four weeks ended March 24, reaching an all-time high of $2,721.

The Mortgage Bankers Association also released its February purchase application payment index that day and found that the median payment increased $50 from January to $2,184.This number is An increase of $123 from February 2023.

The PAPI value rose 2.4% to 170.7 in February from 166.8 in January. In the same month last year, the index was 169.7, up 1.1%, with the year-over-year change attributed to a 4.8% increase in median income and a 6% increase in payments.
Interest rates remain at around 7% MBA says this is a contributing factor.

“Challenging affordability conditions and low housing supply are keeping some potential homebuyers on the sidelines this spring,” Edward Thaler, vice president and executive director of housing economics at the American Housing Institute, said in a release. Lower interest rates are expected to spur new activity in the housing market in the coming months. “

However, Redfin pointed out that the number of new listings during the period increased by 15% compared with the four weeks ending March 24, 2023, the highest in the past three years; the total number of homes increased by 6%, the largest increase in about a year.

“High mortgage rates are no longer a deterrent to buyers like they were last year; many are now looking to get in before prices rise further,” Rachel Riva, a Redfin agent based in Miami, said in a press release. My most recent listing is in Contracts were signed within 10 days, with most receiving multiple offers. “

Riva noted that buyers are responding to rising mortgage rates in a variety of ways. “Some people are paying large down payments to lower their monthly payments, and some are willing to accept high interest rates now in the hope of refinancing when interest rates come.” Next. “

In more than 95% of U.S. counties for which Attom Data Solutions has enough data to analyze, first-quarter median single-family home and condo prices remained lower than historical averages.

Meanwhile, the primary cost of these homes accounted for 32.3% of the national average salary in the first quarter, a few percentage points above common lending guidelines.

As bad as this data sounds, it’s actually a Improvement from season to season Atom said the situation is the same in both, although worse than a year ago.

The national average salary share needed to make a typical mortgage payment, including property taxes and insurance, remains nearly 3 percentage points higher than a year ago and 11 percentage points higher than at the start of 2021.

“With affordability indicators improving for the second consecutive quarter, the outlook for homebuyers is brightening again,” Attom CEO Rob Barber said in a release.

Although owning a home remains a financial burden or even a pipe dream for many families, with mortgage rates falling from a high of nearly 8% and home prices rising only slightly, “for the average family, “Owning a home has become easier,” Barber said. “So far this year, working-class people have become more affordable. The upcoming spring homebuying season will tell a lot about whether home prices remain stable enough to make this happen.” This trend can continue.”

Only 13 counties across the country are more affordable than the historical average, but even that needs to be taken with a grain of salt, as two of those areas are New York County (also known as Manhattan) and San Francisco County (the entire county is known as Manhattan). City limits.These are traditionally among the priciest markets in the United States

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