Monthly mortgage payments are increasingly unaffordable, despite low interest rates
CBSN
Housing prices continue to surge across the nation, but incomes for home buyers aren't keeping up with soaring real estate values. The result: Monthly mortgage payments are now unaffordable for the typical buyer.
That's according to calculations from the Federal Reserve Bank of Atlanta, which found that the median-income household would now need to spend more than 32% of its annual income to afford a median-priced home — or above the 30% threshold for affordability that is used by the U.S. Department of Housing and Urban Development. Home affordability is at its lowest point since 2008, according to the analysis.
These trends are souring some Americans' outlook on home-buying, with only about 3 in 10 people surveyed by Fannie Mae in August saying they believe it's a good time to buy, down from almost 6 in 10 people in May. Housing prices across the nation have soared, with home listing prices jumping almost 9% in September compared with a year earlier, according to Realtor.com. Despite record-low mortgage rates, the increase in home prices is translating to bigger monthly outlays for new homeowners.
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