Published by FOX Business | March 12, 2023
Atlanta Federal Reserve reports U.S. households have to spend nearly 43% of their monthly income to afford the median home price
If you’re stretching your bottom dollar and doing everything right to buy that first-time home—and still striking out—you’re not alone.
According to the Federal Reserve Bank of Atlanta, U.S. housing affordability is at its lowest level in a decade. As of December, the median American household would have to spend about 42.9% of their income to afford the median-priced house, according to its index.
The data shows that housing affordability is worse today than during the peak of the 2008 housing bubble. It is also well above the 32.6% share just one year ago; at this rate, the typical American is paying about $607 more per month to own a median-priced home compared to last year.
“The numbers are just not working right now,” homeowner-hopeful Sam Pascal said alongside his wife, Jacky, on “Varney & Co.” Thursday. “I think what we’re seeing is that buyers are holding onto their homes and there’s little supply, and they don’t want to let go.”
“The increase in mortgage rates has put many homebuyers back on the sidelines once again, especially first-time homebuyers who are most sensitive to affordability challenges and the impact of higher rates,” MBA’s vice president and deputy chief economist Joel Kan previously told FOX Business.
Even with higher interest rates putting homeownership out of reach for millions of Americans, prices are still steeper than just one year ago.