(Bloomberg) -- It’s getting harder to afford a home in the U.S.
For first-time buyers, mortgage payments jumped to 25.6% of household incomes in the fourth quarter, the worst affordability level in three years, according to the National Association of Realtors. The share was 22.4% a year earlier.
The surge in purchase prices combined with rising mortgage rates added $201 a month to a typical home-loan payment, the group said in a report Thursday.
The country faces an affordability squeeze as buyer competition for a dwindling supply of listings pushes prices up quickly. Meanwhile, mortgages are getting more expensive, with rates this week reaching the highest level since January 2020 for 30-year loans.
The median price of an existing single-family house rose 14.6% in the fourth quarter to $361,700, the Realtors group said. It was a slightly slower pace than the 15.9% annual gain a year before.
“The escalating prices took a toll on home shoppers, compelling many to come up with extra cash and forcing others to delay making a purchase altogether,” said Lawrence Yun, the group’s chief economist. “A number of families, especially would-be first-time buyers, are increasingly being forced out of the market, and this is why supply is critical.”
Of the 183 metropolitan areas measured by the Realtors, 67% had double-digit price gains compared with 78% in the third quarter. The markets with the biggest annual increases were Punta Gorda, Florida, with a 28.7% jump, followed by Ocala, Florida, with 28.2% and Austin, Texas, with 25.8%.
©2022 Bloomberg L.P.
Advertisement