Per Bloomberg
The average American buyer faces one of the most unaffordable housing markets, where first-time buyers would need to earn as much as $90,000 in 2022. Now, housing prices sit at an almost four-decade-high unaffordable level.
In 2019, first-time buyers needed to earn about $70,000, but in 2022, just three years later, the needed earnings increased by $20,000. Zillow Group Inc.'s senior economist Nicole Bachaud gave a statement regarding how homebuyers with less income struggle in the market.
Bachaud: “The scales are shifted toward homebuyers with higher incomes and a better financial background. This will be the norm until we get more inventory in the market.”
The National Association of Realtors notes that first-time buyers made up the smallest fraction of sales in 2022 at just 26%. Recent Freddie Mac data also revealed that the 30-year fixed mortgage reached 6.65%, climbing for the fourth week in a row.
A New York broker, Kimberly Jay, who works with Compass, gave another statement sharing how parents were giving properties and how the city was full of wealthy people. A third of first-time homeowners relied on families or friends for gifts and loans pre-pandemic.
Jay: “I see some parents giving gifts for the full price of a million-dollar property... This is a city with wealthy people.”
The National Association of Realtors records shows that in 1981, the median age for first-time buyers was just 29. In 2022, the median age for first-time buyers has skyrocketed to 36.
In late January, home sales reached their lowest pace since Nov 2010 as they dropped for the 11th month in a row in December 2022. Total sales were down by 17.8% in 2022 compared to 2021.
The US housing market fell by $2.3 trillion in the 2nd half of 2022. This was just 0.9% less compared to the 2008 housing crisis decline.
See flow at unusualwhales.com/flow.
Other News:
- Home Sales Reach Lowest Pace Since Nov 2010, Dropping for the 11th Month in a Row in Dec
- US housing market dropped by $2.3 trillion in the 2nd half of 2022, just 0.9% less than the 2008 housing crisis decline
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