{"id":2116009,"date":"2023-12-05T06:19:02","date_gmt":"2023-12-05T11:19:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/home-economics-the-human-cost-of-the-affordability-crisis\/"},"modified":"2023-12-05T06:25:25","modified_gmt":"2023-12-05T11:25:25","slug":"home-economics-the-human-cost-of-the-affordability-crisis","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/home-economics-the-human-cost-of-the-affordability-crisis\/","title":{"rendered":"The price we pay: The toll of the affordability crisis"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">20<\/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%2Fhome-economics-the-human-cost-of-the-affordability-crisis%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=2116009&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--><h2>Soaring Mortgage Rates and \u2064High Housing Prices Make Homebuying a Challenge<\/h2>\n<p>Soaring mortgage \u200drates have combined with high housing\u2063 prices to push homebuying out of\u200c reach for many people, causing\u2064 major knock-on effects on their lives. The one-two\u2063 punch\u200d is\u2062 causing\u2063 some people to reconsider \u2063buying\u2064 a home or discouraging them from searching at all. Still,\u2064 other \u200dhomebuyers have decided\u200b to bite the bullet\u200b and purchase a home in \u2064this market, but \u2064for a property\u200d significantly smaller than they\u2062 could have bought just two\u200d years ago.<\/p>\n<h3>John Tyson&#8217;s Dilemma<\/h3>\n<p>John\u2064 Tyson moved\u2062 to Philadelphia over the summer and is looking to put down roots in\u200b the area,\u2063 which is where he grew up. He \u200bbegan searching for homes just\u2062 outside the city but realized after\u2063 research that the time was not \u2064right to buy. Tyson said he used \u200bonline mortgage calculators to\u200d determine, with mortgage rates around 7.5%, that\u200c renting is \u200dmore\u200b attractive \u2062than buying. \u200dIn fact,\u200c the advantage of renting\u200d versus buying has never been greater. \u200bTyson told the Washington Examiner \u2062that he sees buying\u2063 a home as a good investment\u2062 for the long term,\u2062 but paying\u200b $3,000 or $4,000\u2062 a month\u200b is too much of a stretch for him \u2064right now.<\/p>\n<p>For context, Tyson was paying just under $2,000\u200d a \u2063month\u200c in rent in Denver and was spending more \u200dthan $2,000 when he was living\u2063 in New\u200d York City\u2064 after he graduated from college.\u2063 &#8220;I was looking over it all and\u200b everything, and I\u2062 just kind of realized \u200cthat now is not the best time to buy, just\u200c given\u200d the mortgages\u2062 and everything like that,&#8221; \u2063Tyson \u200dsaid.<\/p>\n<h3>The \u200cImpact of Ultra-Low\u2063 Mortgage Rates<\/h3>\n<p>In researching \u200baffordability, Tyson stumbled across a major factor\u200b propping up house prices: Inventory is low because people who\u200c locked in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/this-housing-indicator-does-not-bode-well-for-the-economy\/\" title=\"This Housing Indicator Does Not Bode Well for the Economy\">ultra-low mortgage rates<\/a> during the pandemic are holding \u200bon to their homes instead of selling in order to \u200ckeep that bargain deal. &#8220;All of those people\u200c are holding back, so\u200c it&#8217;s kind \u2064of inflating the market&#8217;s housing \u2063prices a little bit,&#8221; Tyson said.<\/p>\n<p>Because \u2062mortgage rates have\u200c surged so much, \u2064owners of \u200dexisting homes who have mortgages \u200cwith rates locked in before 2022 are \u2064shying away from \u2063selling because they want to\u200d keep their historically low rates. Almost\u2064 two-thirds of \u200dall mortgages have rates below 4%, and 90% have rates \u200bbelow 6%, according to Freddie Mac.<\/p>\n<p>With few people willing to give\u2062 up such favorable borrowing terms, there is less \u2064home inventory on\u2063 the \u200dmarket, making new homes\u2062 more\u2064 of a hot commodity. \u200cSales of new homes in October were 17.7% higher than in September 2022. Additionally, the median sales price for a new home was $409,300\u2064 in \u200bOctober. In\u2063 contrast, \u200dexisting home sales \u200bin October slowed 4.1% \u200dto a \u2064<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/report-home-prices-are-up-nearly-25-since-this-time-last-year\/\" title=\"Report: Home Prices Are Up Nearly 25% Since This Time Last Year\">seasonally adjusted annual rate<\/a> of 3.79 million, \u2064their \u2064lowest level in more than \u200ba decade.<\/p>\n<h3>The\u2063 Waiting Game<\/h3>\n<p>But \u200chow long Tyson ends\u200b up holding\u200b off on \u200dentering the housing market will depend on several factors \u2014\u2063 the biggest \u2063being when \u2064mortgage rates \u2062begin \u2064to\u200c edge lower. Tyson said that,\u200b ideally, he would \u2063like\u200b to see rates\u2062 fall back to the 5%\u2063 level, although he would even\u200c be\u2064 open\u2063 to locking in a 6% rate if the housing prices \u200dalso fell to\u2064 a more reasonable level. Tyson said he is likely looking at waiting at least\u2064 another year, noting that it will take a while for the Fed to begin reducing its\u200d interest rate target and mortgage rates to\u200d respond by\u200b drifting down. &#8220;A year from now, especially \u200dafter one year of\u2063 a lease, then, come that\u2062 next lease term, I&#8217;d probably \u200bthink about, OK,\u200b is it time to \u200cbuy, kind of \u200creevaluate the market,\u2063 especially as that lease comes up\u2064 for \u200drenewal,&#8221; he explained.<\/p>\n<p>Tyson \u2064said he would be saving up money for the purchase in the meantime. He hopes the\u200d extra savings from waiting \u2063at least \u200ba \u200byear can help make his\u2064 purchase\u200c stretch even farther when searching for homes.\u2063 Tyson, who is 27, also feels\u200c a \u2063bit like his generation missed out. Contemporaries of his father, who made his first home purchase at 23, don&#8217;t realize how \u200ddifficult it is for young people nowadays, he said. \u200bIn 2022, the typical age to buy a first home increased \u2063to 36, the\u200d oldest ever. In 2021, the average age of\u200b a first-time homebuyer \u200bwas \u206233, according to data from the National Association of \u200dRealtors.<\/p>\n<h3>The Impact on Real Estate Agents<\/h3>\n<p>The \u2062housing affordability crisis \u2062isn&#8217;t just\u2064 pushing possible homebuyers out of the market.\u200b It is also tough on real \u2063estate\u2064 agents\u2063 who make their living off home sales. One <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/young-people-should-get-involved-in-politics-cant-wait-in-line-rep-cawthorn\/\" title=\"Young People Should Get Involved in Politics, Can\u2019t \u2018Wait in Line:\u2019 Rep. Cawthorn\">real estate agent<\/a> in \u200cthe northern Virginia area told the Washington Examiner that she has heard of agents quitting the industry, a bad \u200dsign, even considering the historic volatility of the sector.<\/p>\n<p>The real \u2064estate agent said that during the pandemic (when mortgage rates were at historic \u2064lows), she was seeing anywhere from\u200c 10 \u2063to 20\u2062 offers\u2062 per home. Now, it&#8217;s only\u2062 about three\u200c to six offers per property. She also\u200d said she \u2063has \u200cnoticed much less traffic\u200d at \u200copen houses \u2064and\u2064 that \u200bactual private showings are down.<\/p>\n<p>The \u2063real estate agent said she has also seen properties being\u2062 advertised\u2063 differently. For instance, \u200bshe has property listed in Alexandria, Virginia, where the seller is in a position to \u200coffer seller \u200bfinancing. &#8220;We actually huddled together with\u2064 the seller and \u200bhave decided to change some of our marketing strategy, and they are going to offer seller financing,&#8221; she said. &#8220;But traditionally, when seller \u200cfinancing has been offered, \u200cit has\u200b been at \u200dworse\u200d terms \u2064than what the market will yield &#8230; but in this case, the\u2062 sellers are actually offering\u2062 a below-market interest rate \u2062to incentivize buyers to come to their home and \u200cafford \u2063it right out of the gate on a monthly basis.&#8221;<\/p>\n<h3>The Challenges for the \u2063Real Estate Industry<\/h3>\n<p>Patty Zuzek, a Minnesota-based broker with 28 years of experience in the real estate industry, said homebuying has greatly decelerated\u200c as mortgage rates rise\u2062 and \u2063home prices \u2063remain elevated. She said home sales transactions for her company are down to about half of what\u200d they were just a year ago. &#8220;We are seeing people hold \u200coff \u2063\u2014 they might be looking, might \u2062be looking, oops \u200bthe \u2062rates went up one \u200dmore time and they&#8217;re like, &#8216;I&#8217;m out,'&#8221; Zuzek told the Washington Examiner during an interview.<\/p>\n<p>The pressures \u200bon the industry\u2063 extend beyond the\u200d mortgage market. Zuzek, whose company also builds homes, said the cost\u2064 of building has\u200b also\u2063 risen, as has the cost of\u2062 government regulatory compliance fees. &#8220;So it all continues to go up, though \u200bwhen rates go\u2063 up, it \u2063limits the affordability\u200b and what people can buy \u2014 whether\u2063 it is existing or not,&#8221; she said.<\/p>\n<p>Zuzek \u200dsaid she thinks there is another element involved that is more psychological: fear. &#8220;The younger generation that is purchasing has\u200c never seen anything in \u2064that 8% [range] because we had such artificial low rates\u2062 for years \u200dand years and years from the foreclosure boom that we were\u200c all in,&#8221; she said.<\/p>\n<p>Despite\u2064 all of the headwinds, Zuzek remains \u2062optimistic. &#8220;Our industry is very cyclical. Housing is very cyclical.\u2062 I&#8217;m very excited to see what the future is going to bring, and\u200d I think educating \u2064consumers is one of \u200cthe greatest things we do as\u200b realtors,&#8221; she said.<\/p>\n<h3>Some\u2064 Homebuyers Still Take the Plunge<\/h3>\n<p>But the market \u200dhasn&#8217;t dissuaded everyone from entering it,\u200c and some \u2062have left\u200b very satisfied they were \u200dable to end \u200dup in a home they own and are not\u2063 losing\u200d money each \u2062month \u200cpaying for rent. Samantha Cassin is a recent\u2063 homebuyer and decided she \u200bwould enter the housing market\u2062 this year \u2062despite the high \u2063mortgage\u200d rates.\u2062 Cassin and her husband married last November \u200dand told the Washington Examiner they knew they \u200bwanted to purchase their own home regardless of\u200d the \u2062timing.<\/p>\n<p>Cassin said she \u2063and her husband put much thought and discussion into the process. \u200cThey started the\u2063 home\u2063 search in April. The whole process, which she said \u200bwas at times very\u200b tiring, took between seven and eight months. &#8220;We kind of went in knowing we \u2062would have to\u200c deal\u2064 with it for a little\u200b and knew that we wanted\u200d to probably refinance when we were able to,&#8221; Cassin \u2064explained. &#8220;We knew our budget, we knew what we could afford, and we knew what our parameters were.&#8221;<\/p>\n<p>&#8220;We really went into it knowing what our limits were,&#8221; she added.<\/p>\n<p>Cassin said while the \u2062market\u2064 isn&#8217;t\u200b the best right now and that\u200b she and her husband might have ended up unlucky with the timing, they were eager to start their life together\u2064 and take  <\/p>\n<h2> How have soaring mortgage rates and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/trying-to-turn-texas-blue-nyt-opinion-piece-sells-leftists-on-texas-as-best-place-to-live\/\" title=\"Trying To Turn Texas Blue: NYT Opinion Piece Sells Leftists On Texas As Best Place To Live\">high housing prices<\/a> affected the\u2063 real \u2062estate industry?<\/h2>\n<p><span>  \u2062 T creates that double-edged \u200dsword\u200d that puts \u200badditional pressure on our industry,&#8221; she said.<\/p>\n<p>The combination of\u2062 soaring mortgage rates and high housing prices\u200c has undoubtedly made \u2063homebuying a challenge for many individuals. It has forced\u2062 potential \u200bbuyers to\u200d reevaluate their options, oftentimes resulting \u2064in \u200cthe postponement of their homeownership dreams. The impact of these inflated\u2063 costs extends\u200b beyond the realm of\u2064 personal finance, affecting various aspects of the \u200dreal estate industry as well.<\/p>\n<p>John \u200bTyson, a prospective homebuyer in Philadelphia, found himself caught in the midst of this housing crisis. Despite his desire to put down roots in his hometown, Tyson realized that the prevailing conditions were not conducive to purchasing a home. With mortgage rates reaching as high\u2062 as 7.5%, he concluded that renting would be \u2062a more financially prudent choice. This sentiment is\u200c echoed by many individuals who find themselves unable\u200c to\u200d afford the exorbitant\u2062 monthly payments associated \u2063with homeownership. \u200bThis represents a significant shift from \u2062just a few years\u200b ago \u200dwhen people like \u200bTyson were able \u2064to purchase larger properties at a fraction\u2064 of the cost.<\/p>\n<p>A key factor contributing to this affordability crisis is the\u2063 inventory \u2064shortage caused by homeowners clinging\u2064 onto their \u2062homes due to \u2062low mortgage rates obtained during the \u200dpandemic. \u200bAs a result, the market is flooded \u200cwith prospective buyers vying for a \u2062limited\u200b number of available properties, driving housing \u2062prices even \u2064higher. The scarcity of inventory has transformed \u2062new homes into hot\u2064 commodities, \u200dresulting in\u200c increased sales and soaring median prices. In contrast, existing home sales have stagnated, reaching \u2063their lowest levels in over \u200ca \u2062decade.<\/p>\n<p>Tyson&#8217;s decision to wait before \u2062entering \u200cthe\u200c housing market highlights the importance of monitoring mortgage \u200crates to\u200d determine the optimal time \u2063for purchase. He hopes to see rates decrease to more manageable levels before\u200d committing to homeownership. However, the timeline for achieving this ideal scenario remains uncertain, as it relies on various factors,\u2063 including\u2063 the Federal Reserve&#8217;s actions and\u2062 the rate of market response. Despite the waiting game, Tyson is diligently \u2064saving up\u200d in the hopes\u200b of stretching his budget even further when the time comes to buy.<\/p>\n<p>This housing affordability crisis not only \u200baffects potential homebuyers \u200dbut also has a significant impact on real estate agents. The dwindling number of buyers\u2062 in the market,\u200c coupled\u200c with\u200d reduced competition for properties, \u200bhas resulted in fewer sales\u2064 transactions. Some agents have even chosen to leave \u2062the industry due to these challenging conditions. Others have\u200d had to \u2062adapt their marketing strategies, resorting to unconventional tactics, such as offering\u200d seller\u200c financing, to entice buyers. Nonetheless, the industry as a whole continues to face tremendous hurdles as rising mortgage rates and \u2062elevated costs persist.<\/p>\n<p>Patty Zuzek, a seasoned broker with years of experience, observes\u200b the drastic slowdown in homebuying as mortgage rates rise and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-rent-prices-touch-near-record-high-in-august-report\/\" title=\"US rent prices reach near-record high in August, says report.\">home prices remain elevated<\/a>. She notes \u2063that potential buyers are becoming more hesitant, often backing out when\u200c rates increase further. Additionally, the costs associated with building homes and complying with government regulations\u200c have risen,\u2063 further \u200dadding to the financial burden faced by industry professionals.<\/p>\n<p>As mortgage rates and housing prices continue \u2064to soar, the dream of homeownership becomes increasingly elusive for many individuals. The challenges\u2064 inherent \u200din this market necessitate\u2063 careful \u2062consideration and\u200d strategic financial planning. While some homebuyers may opt to wait for more favorable conditions, others find themselves compromising\u200c on the \u200bsize \u2064and location of their desired property. The \u200bimpact\u200d of these circumstances extends beyond individual homeowners, affecting the entire real estate\u2064 industry. \u200dAs stakeholders navigate these uncertain times, it is essential to remain \u2064vigilant, adapt to changing\u200b dynamics, and explore innovative\u200b solutions\u2062 to ensure\u200d a sustainable and\u200d accessible housing market for all.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Soaring mortgage rates and high housing prices have made homebuying unattainable for many, leading to significant repercussions in their lives. This double blow is prompting some to rethink purchasing a home or even dissuading them from searching altogether. However, some determined buyers have chosen to take the plunge and make a purchase<\/p>\n","protected":false},"author":1,"featured_media":2116010,"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":[538],"tags":[],"class_list":["post-2116009","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"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\/2116009","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2116009"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2116009\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2116010"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2116009"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2116009"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2116009"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}