Low-price home affordability increases as mortgage rates ease: Report
Less-expensive starter houses are becoming more affordable as mortgage rates are coming down, a trend that’s being bolstered by a recent boost to household incomes.
Homebuyers have to earn $77,000 to afford homes in the 35th-percentile of house prices or below, which represents a 0.4-percent decrease in the requisite income level since the year prior, according to real estate company Redfin.
“That’s the first annual decline since 2020 thanks to falling mortgage rates,” the company said in a Monday release.
Mortgage rates have been falling generally since October of last year, with the standard 30-year fixed rate mortgage decreasing from 7.8 percent to 6.08 percent over that period, albeit through a fair amount of volatility.
Rates for the 15-year mortgage have dropped from about 7 percent to 5.15 percent over the same time frame.
Mortgage rates move in near-lockstep with the yield on 10-year Treasury bonds, but they are undergirded by the interbank lending rate. The rate remained elevated at 5.33 percent over the past year but was recently dropped by the Federal Reserve to 4.83 percent.
Despite the increase in affordability of less expensive houses, Redfin economist Elijah de la Campa noted that the quality of these houses has declined over time.
“Starter homes aren’t what they used to be,” he said in a statement. “A decade ago, a turnkey four-bedroom house in a nice neighborhood was often considered a starter home, but today, a small fixer-upper condo is often all a first-time homebuyer can afford. The American Dream is changing; for many, it no longer involves a house and a white picket fence.”
U.S. median household income popped in 2023 to $80,610, a 4-percent increase from 2022, representing the first increase since 2019.
Housing prices are still relatively high compared to prices overall since housing inflation tends to trail headline inflation. Seasonally adjusted overall inflation fell to a 2.6-percent annual increase in the August consumer price index, while the owners’ equivalent rent component of the index has fallen to just a 5.4-percent annual increase.
Owners’ rent inflation ticked upward in August from 5.3 percent to 5.4 percent, its first upward movement since April of last year.
Date: | |
Tag: | Mortgage |
-
World - The Wall Street Journal
China to Allow Home Buyers to Refinance Mortgages
The move is the latest in a weeklong burst of easing measures aimed at stimulating China’s moribund property market.Yesterday - China -
Top stories - CBS News
What could make mortgage interest rates drop this October?
Mortgage interest rates could still fall in October, even without a Fed meeting. Here's what could cause that drop.1 hour ago - Mortgage -
World - ABC News
Takeaways from AP's report on how shrimp farmers are exploited as supermarkets push for low prices
An investigation focused on three of the world’s largest shrimp producers claims that as big Western supermarkets make windfall profits, their aggressive pursuit of ever-lower wholesale prices is ...14 hours ago -
Top stories - BBC News
Rates low for too long, says ex-Bank of England boss
Lord Mervyn King says inflation has now been tamed and interest rates are "in the right ballpark".Yesterday -
Politics - The Hill
Trump knocks 'Low Rated' Bill Maher after criticism
Former President Trump knocked “Low Rated” comedian Bill Maher as “obnoxious and disgusting” Sunday and urged Fox News not to air footage of the HBO political talk show host in the future. “I ...5 hours ago - Donald Trump -
Top stories - CBS News
Florida home hurricane damage reports changed, whistleblowers say
A family expected a large insurance payout after Hurricane Ian devastated their Florida home. Then the check came, and questions about allegedly shortchanged homeowners came with it.20 hours ago - Florida -
Business - The New York Times
China Stocks Surge After Mortgage Curbs Are Removed
After seeing prices decline for years, Chinese officials have made a burst of policy changes aimed at making it easier to buy homes.1 hour ago - China -
World - The Guardian
High tech, high yields? The Kenyan farmers deploying AI to increase productivity
AI apps are increasingly popular among small-scale farmers seeking to improve the quality and quantity of their crop. Sammy Selim strode through the dense, shiny green bushes on the slopes of his ...15 hours ago -
Business - The New York Times
Apparel Resale Growth Drives Increased Vintage and Thrift Store Presence
Last year, apparel resale in the United States grew seven times the rate of the broader retail industry. Independent resellers and corporate giants are getting creative to meet the demand.10 hours ago
More from The Hill
-
Politics - The Hill
Trump says he's spoken to Musk about getting Starlink for areas damaged by Helene
Former President Trump on Monday said he’s spoken with Elon Musk about providing Starlink internet service for those without power in states ravaged by Hurricane Helene. Trump visited Valdosta, ...34 minutes ago - Donald Trump -
Politics - The Hill
Israeli attacks on Hezbollah roil Middle East: Five pressing questions
Israel has decimated Hezbollah’s leadership with strikes over the past week, while also killing hundreds of civilians and forcing nearly 1 million people from their homes. Hezbollah’s longtime ...45 minutes ago - Israel -
Politics - The Hill
Trump says he’ll do a ‘personal play by play’ of vice presidential debate
Former President Trump announced Monday he will do a “personal play by play” of the vice presidential debate Tuesday evening. “I will be doing a personal PLAY BY PLAY of the Debate tomorrow between ...50 minutes ago - Donald Trump -
Politics - The Hill
Georgia lawmakers press Biden to 'promptly consider' major disaster declaration request
Sen. Jon Ossoff (D-Ga.) led Georgia’s congressional delegation Monday in asking the White House for a disaster declaration in the state in the wake of Hurricane Helene. In the letter, signed by ...55 minutes ago - Joe Biden -
Politics - The Hill
Fortnite maker accuses Samsung, Google of colluding to block app store competitors
Fortnite maker Epic Games filed a lawsuit Monday accusing Google and Samsung, the world’s largest Android maker, of conspiring to block third-party competitors of the Google Play Store. The suit, ...56 minutes ago - Google