{"id":2071161,"date":"2023-10-18T01:29:04","date_gmt":"2023-10-18T05:29:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-housing-affordability-at-lowest-level-since-1980s-national-association-of-realtors\/"},"modified":"2023-10-18T01:35:07","modified_gmt":"2023-10-18T05:35:07","slug":"us-housing-affordability-at-lowest-level-since-1980s-national-association-of-realtors","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-housing-affordability-at-lowest-level-since-1980s-national-association-of-realtors\/","title":{"rendered":"US housing affordability hits record low since 1980s: Realtors"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fus-housing-affordability-at-lowest-level-since-1980s-national-association-of-realtors%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2071161&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<p>The U.S. housing\u2064 market has experienced a slowdown in activity this year due to tighter supply, \u200baccording to Thomas Barkin, the \u2063president of the Federal Reserve Bank of Richmond.<\/p>\n<p>Speaking at a Real Estate Roundtable event in Washington, D.C., Mr. Barkin\u2064 explained that home \u200dprices have remained strong \u2064despite \u2063higher interest rates and slowing sales volumes.<\/p>\n<p>But the \u200cindustry has been longing for lower \u200drates, he noted.<\/p>\n<div class=\"shortcode\">\n<!--$--><\/p>\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/h2>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-4 sm:line-clamp-3\">\n<a href=\"http:\/\/www.theepochtimes.com\/world\/real-estate-agency-predicts-home-prices-will-stabilize-for-rest-of-2023-post-5509216?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"text-sm sm:text-base\">Real Estate Agency Predicts \u200dHome Prices Will Stabilize\u200d for Rest of \u200b2023<\/h3>\n<p><\/a>\n<\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">10\/12\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[70px] sm:basis-[120px]\">\n<a href=\"http:\/\/www.theepochtimes.com\/world\/real-estate-agency-predicts-home-prices-will-stabilize-for-rest-of-2023-post-5509216?ea_src=author_manual&#038;ea_med=related_stories\">\n<picture><source type=\"image\/webp\" https:><\/source><source type=\"image\/*\" https:><\/source>\n<\/picture>\n<\/a>\n<\/div>\n<\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-4 sm:line-clamp-3\">\n<a href=\"http:\/\/www.theepochtimes.com\/bright\/living-in-under-500-square-feet-is-a-tiny-home-right-for-you-heres-how-to-find-out-5510835?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"text-sm sm:text-base\">Living in \u2064Under 500 Square Feet: Is a Tiny Home Right for You? Here\u2019s How to Find Out<\/h3>\n<p><\/a>\n<\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">10\/17\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[70px] sm:basis-[120px]\">\n<a href=\"http:\/\/www.theepochtimes.com\/bright\/living-in-under-500-square-feet-is-a-tiny-home-right-for-you-heres-how-to-find-out-5510835?ea_src=author_manual&#038;ea_med=related_stories\">\n<picture><source type=\"image\/webp\" https:><\/source><source type=\"image\/*\" https:><\/source>\n<\/picture>\n<\/a>\n<\/div>\n<\/div>\n<\/div>\n<p><!--\/$-->\n<\/div>\n<p>&#8220;You\u2063 may know that the last \u2062time the Fed tackled high inflation, in \u2063the \u201980s, homebuilders sent Paul Volcker two-by-fours inscribed with the message: Lower interest rates,&#8221; he said.<\/p>\n<div class=\"my-5\">In a <a href=\"https:\/\/www.mba.org\/docs\/default-source\/advertising\/mba-nar-nahb-fed-rate-path-final-1.pdf\" target=\"_blank\" rel=\"noopener\">letter<\/a> to Fed Chair\u2062 Jerome Powell by\u200c the National Association of Home Builders, the Mortgage Bankers Association, and the National Association of Realtors, the central bank \u2062was\u2063 urged not to pull the trigger on more rate hikes.<\/div>\n<p>&#8220;Further \u200drate increases and\u200c a \u2064<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-housing-affordability-at-lowest-level-since-1980s-national-association-of-realtors\/\" title=\"US housing affordability hits record low since 1980s: Realtors\">persistently wide spread pose broader risks<\/a>\u2062 to\u2062 economic\u2062 growth, heightening\u200d the \u2064likelihood \u200dand magnitude of a recession,&#8221; the letter stated.<\/p>\n<div class=\"shortcode post-related-videos\">\n<!--$--><\/p>\n<div class=\"lazyload-wrapper\">\n<div class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<p><!--\/$-->\n<\/div>\n<div class=\"my-5\">A treasure \u2062trove of data and research shows \u200bthat further Fed tightening could worsen current conditions in the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/china-cracks-down-on-real-estate-industry-so-that-families-can-afford-housing\/\" title=\"China Cracks Down On Real Estate Industry So That Families Can Afford Housing\">real estate sector<\/a>, particularly in terms of\u2064 affordability.<\/div>\n<h2>Housing Affordability Challenges<\/h2>\n<p>With supply failing to meet demand and mortgage rates \u2062approaching 8 percent, housing affordability reached a new all-time low in August, according to industry data.<\/p>\n<div class=\"my-5\">The <a href=\"https:\/\/cdn.nar.realtor\/\/sites\/default\/files\/documents\/hai-08-2023-housing-affordability-index-2023-10-13.pdf?_gl=1*1jxae0v*_gcl_au*MjA4MTA1NzkyMC4xNjk3NTU1NDUx\" target=\"_blank\" rel=\"noopener\">NAR Housing Affordability Index<\/a> dropped to 91.7 in August, the lowest reading since 1989,\u2062 indicating that a household\u2064 with a median income does not earn enough to qualify for a mortgage on a median-priced home.<\/div>\n<p>NAR \u200cfigures revealed that in August, the typical family needed to earn $107,232 to qualify for a mortgage with a\u200b 20 percent downpayment. Additionally, \u200bthe average family spent over one-quarter (27 percent) of their income on annual\u2062 mortgage payments.<\/p>\n<p>Housing inventories have\u200c worsened over the past year, with existing home \u200csales declining in 13 \u200bof the last 15 months, including a\u2064 0.7\u2064 percent drop \u2063in August.<\/p>\n<p>The\u2062 challenge facing the \u200dU.S. <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/2021-cant-be-any-worse-can-it\/\" title=\"2021 Can't Be Any Worse, Can It?!\">real estate market<\/a> today is\u2062 the lack of homes available for sale.<\/p>\n<p>When \u2063the Federal Reserve slashed\u200c interest rates to near-zero during the \u2064coronavirus pandemic, mortgage \u200drates reached record lows.<\/p>\n<div class=\"my-5\">According to\u200b the <a href=\"https:\/\/www.freddiemac.com\/pmms\" target=\"_blank\" rel=\"noopener\">Freddie Mac \u2063Primary Mortgage Market Survey (PMMS)<\/a>, the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/u-s-housing-affordability-index-drops-to-worst-measurement-in-16-years\/\" title=\"U.S. Housing Affordability Index Drops to Worst Measurement in 16 Years\">30-year fixed-rate mortgage dropped<\/a> to 2.77 percent in August 2021. However, it is now close to a 23-year high of 7.6 percent.<\/div>\n<div class=\"my-5\">Home prices have also surged since the public health crisis, \u2063 <a href=\"https:\/\/fred.stlouisfed.org\/series\/MSPUS\" target=\"_blank\" rel=\"noopener\">rising<\/a> nearly 30 percent to a median sales price of $416,100.<\/div>\n<div class=\"post-figure\" style=\"margin-left:0;margin-right:0;max-width:1200px\">\n<figure style=\"width:640px;margin-left:auto;margin-right:auto\" class=\"alignnone\"><figcaption>A\u2064 &#8220;for sale&#8221; sign hangs in front of a home in Miami, Fla., on June 21, 2022. (Joe \u2064Raedle\/Getty Images)<\/figcaption><\/figure>\n<\/div>\n<p>The combination of high mortgages and prices has made it difficult \u2062for the new generation of homebuyers to achieve the American dream of homeownership. However, those who purchased a \u200bhome before the Fed&#8217;s quantitative tightening cycle began are in a good position, with mortgage rates of 2 to 4 percent \u2062and properties that have gained significant equity.<\/p>\n<div class=\"my-5\">A recent analysis by Redfin <a href=\"https:\/\/www.redfin.com\/news\/high-mortgage-rates-lock-in-homeowners-2023\/?mod=article_inline\" target=\"_blank\" rel=\"noopener\">revealed<\/a> that 92 percent of homeowners\u2062 have a mortgage rate\u2063 below 6 percent, providing little incentive to sell\u2064 and move to a home with a higher rate. Nearly one-quarter (24 percent) have a rate below 3 percent, close to a\u2063 record\u2064 high achieved in the first quarter of 2022.<\/div>\n<p>Ultimately, the housing market\u200b could be divided into \u200btwo groups: those benefiting \u200dfrom low mortgage rates and accumulated equity, and those struggling with affordability.<\/p>\n<p>Andy Walden, the ICE vice \u200bpresident of enterprise research, warned that incomes would\u200d need to increase by 55 percent\u2062 or home prices would have\u2063 to drop by 35 percent to restore affordability.<\/p>\n<div class=\"my-5\">&#8220;Those are massive movements\u2064 we&#8217;re talking about, and none of \u200dthem are going to happen in a vacuum, and\u2063 none of those single factors are going to make the move,&#8221;\u2064 Mr. Walden <a href=\"https:\/\/www.cnbc.com\/video\/2023\/10\/03\/interest-rates-are-putting-home-demand-and-supply-in-a-gridlock-says-black-knights-andy-walden.html\" target=\"_blank\" rel=\"noopener\">told<\/a> \u2064CNBC earlier this month.<\/div>\n<h2>Mortgage Rates Now and Beyond<\/h2>\n<p>The National Association \u200dof Home Builders (NAHB)\/Wells Fargo Housing \u200dMarket Index (HMI) <a href=\"http:\/\/www.nahb.org\/news-and-economics\/press-releases\/2023\/10\/mortgage-rates-well-above-7-percent-continue-to-hammer-builder-confidence\" target=\"_blank\" rel=\"noopener\">found<\/a> that \u200dbuilder confidence in the real estate market for newly constructed single-family \u200bhomes declined for the third consecutive month in October.\u2062 Higher interest rates have priced out some buyers, including younger families, leading to lower \u2063levels of buyer traffic, according to NAHB Chairman Alicia Huey.<\/p>\n<p>&#8220;Higher rates are also increasing \u2064the cost and availability of builder development and construction loans, which harms supply and contributes to \u2064lower housing affordability,&#8221; Ms.\u200c Huey added.<\/p>\n<div class=\"post-figure\" style=\"margin-left:0;margin-right:0;max-width:1200px\">\n<figure style=\"width:640px;margin-left:auto;margin-right:auto\" class=\"alignnone\"><figcaption>A \u2064<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-housing-starts-surge-in-boost-to-economy\/\" title=\"US Housing Starts Surge in Boost to Economy\">construction worker carries materials<\/a> as he works on a home under\u200b construction at a housing development in\u200c Petaluma, Calif., on March 23, 2022.\u200c (Justin Sullivan\/Getty Images)<\/figcaption><\/figure>\n<\/div>\n<p>NAHB Chief Economist \u200dRobert Dietz\u200b emphasized that increasing housing production is \u200bcrucial to \u200csolving the housing affordability crisis.<\/p>\n<p>&#8220;Boosting housing production would help reduce the shelter inflation component that was responsible for more than half of the overall Consumer Price Index increase in September\u2062 and aid the Fed\u2019s mission to bring inflation back down to 2%,&#8221; he said. &#8220;However, uncertainty regarding monetary policy is contributing \u200bto affordability challenges in the market.&#8221;<\/p>\n<div class=\"my-5\">The September consumer price\u200d index \u200b(CPI) shelter index is up <a href=\"https:\/\/www.bls.gov\/news.release\/cpi.nr0.htm\" target=\"_blank\" rel=\"noopener\">7.2 percent<\/a> compared to a year ago.<\/div>\n<div class=\"my-5\">While the futures market predicts that the Fed will keep rates unchanged at the \u200bupcoming policy meetings, the central bank&#8217;s <a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/files\/fomcprojtabl20230920.pdf\" target=\"_blank\" rel=\"noopener\">Summary of Economic Projections<\/a> suggests one more rate hike this year.<\/div>\n<p>In addition, Treasury yields have been rising, with the 2-,\u2064 10-,\u2062 and 30-year yields reaching their highest levels in 16 years. The\u2062 volatility in the bond market has had a significant impact on the housing market, as mortgage rates are closely tied to Treasury\u2062 bond rates.<\/p>\n<div class=\"my-5\">Fannie Mae <a href=\"https:\/\/www.prnewswire.com\/news-releases\/jump-in-long-term-interest-rates-expected-to-weigh-on-economy-301957113.html\" target=\"_blank\" rel=\"noopener\">projects<\/a> that \u2063mortgage rates will remain in the 7\u200b percent range for most of next year before declining to 6.7 percent by \u200dthe \u2063end\u200d of 2024.<\/div>\n<p>&#8220;In many ways, the housing market experienced four \u2063years of business in a two-year period between mid-2020 and mid-2022,&#8221;\u200d said Doug Duncan, Fannie \u200cMae Senior Vice President\u2063 and Chief Economist. &#8220;With ongoing\u2062 affordability constraints and rising mortgage rates, much of that activity\u200b has essentially been given back. We expect the higher mortgage rate \u200benvironment to continue to dampen housing activity \u2062and further complicate housing affordability into 2024.&#8221;<\/p>\n<p>The FOMC will hold its next two-day policy meeting on Oct. \u200c31 and Nov. 1.<\/p>\n<\/div>\n<\/blockquote>\n<p> <\/p>\n<h2> Why are the National Association \u2062of Home \u2063Builders and other industry associations urging the Fed not to \u2064pursue further rate hikes?<\/h2>\n<p><span>  Ccording to Thomas Barkin, the president of the Federal Reserve Bank\u2064 of Richmond, \u200bthe U.S. housing market has experienced a slowdown in \u2063activity this year due to tighter supply. Despite higher\u200d interest rates and slowing \u2062sales volumes, home prices \u2064have remained strong. However, the\u200d industry has been \u200bhoping for lower rates.<\/p>\n<p>In \u200ba letter to Fed Chair\u2062 Jerome Powell by\u200c the \u2064National Association of Home Builders, the Mortgage Bankers Association, and the \u200bNational Association of \u200dRealtors, \u200dthe central bank was urged not to pursue further rate hikes. The letter stated that further rate increases and a persistently wide spread pose broader \u2062risks to economic growth, increasing the likelihood and magnitude of a recession.<\/p>\n<p>A wealth of data\u2063 and research indicates that further tightening by the Fed could worsen current\u200b conditions in the real estate sector, particularly in terms of affordability.<\/p>\n<p>Housing affordability has become a significant challenge, as supply\u2063 falls short\u200d of demand and mortgage rates approach \u200b8 percent. Industry data\u2062 shows that housing affordability reached a new all-time\u200b low in August.\u2063 The NAR \u200dHousing Affordability Index dropped to 91.7, its lowest reading since\u2064 1989. This signifies that a household with\u200d a median income does not earn enough to qualify for a mortgage on a median-priced home.<\/p>\n<p>The slowdown in the U.S. housing market and the decline in affordability highlight the need for policymakers to \u200caddress these challenges. As the industry waits for lower interest rates, \u2064it\u200d is crucial for the central bank \u200dto consider the potential ramifications\u2064 of further \u2062rate hikes. Balancing\u200d economic growth \u2063with affordability should be a priority to ensure a sustainable and stable housing market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US housing market has slowed down this year due to limited supply, according to Thomas Barkin, President of the Federal Reserve Bank of Richmond. Speaking at a Real Estate Roundtable in Washington, D.C., Barkin noted that despite higher interest rates and a slowdown, home prices have remained robust.<\/p>\n","protected":false},"author":278,"featured_media":2071162,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2071161","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2071161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2071161"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2071161\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2071162"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2071161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2071161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2071161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}