With the continuous rise in housing prices and the increase in mortgage rates, the purchasing power of buyers has been limited. According to statistics, in January of this year, the typical price of a house in the United States was $379,100, a 5.1% increase from the same period last year. According to an analysis by the real estate brokerage firm Redfin, in order to buy a house with an interest rate exceeding 7%, a typical buyer needs an annual income of at least $115,000 and a down payment of 20%, with housing expenses not exceeding 30% of income.
Bankrate pointed out that more than half (51%) of those who have the intention to buy a house also said that the current cost of living is too high for them to afford the down payment and closing costs. In addition, other reasons affecting the intention to buy a house include credit card debt (18%), lack of financial assistance from friends or family (15%), and student loan debt (10%).
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Mark Hamrick, senior economic analyst at Bankrate, said in a statement, "Debt is like quicksand for prospective homebuyers, impeding their ability to realize the dream of homeownership." He also said that the housing affordability issue facing buyers is worsening. The United States still faces a shortage of homes for sale because homeowners with historically low interest rates are reluctant to sell.
Lawrence Yun, chief economist at the National Association of Realtors, discussing the January existing home sales report with reporters, said that the rate of increase in house prices exceeding wage growth is an unhealthy trend and expressed hope for a change in this situation. He emphasized the housing shortage facing the United States.
In addition, in Bankrate's survey, 20% of those who intend to buy a house said they could never save enough money to buy one, with older respondents more likely to express this view. Thirty-six percent of baby boomers said they could never save enough money to buy a house, while 28% of Generation X held the same view.
Nevertheless, according to the National Association of Realtors' 2023 report, baby boomers have the highest proportion of homebuyers, reaching 39%, compared to other generations.
