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In the COVID-19 housing market, the middle class is put at a price

The dream of home ownership has become increasingly out of reach for middle-class Americans during the pandemic.

Soaring home prices and a sharp drop in the number of homes for sale have made it harder for many Americans to buy a home than two years ago, according to a National Association of Realtors study released Monday.

At the end of last year, there were about 411,000 fewer homes on the market that were considered affordable for households earning between $75,000 and $100,000 than before the pandemic, the study found. At the end of 2019, there was a list available that was affordable for 24 households in that income bracket. In December 2021, the figure was one registration for every 65 households.

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The study, the first of its kind from the NAR, calculated affordability for different income levels assuming that households use a 30-year fixed-rate mortgage and spend no more than 30% of their income on fees. housing, including taxes and insurance.

Unlike traditional measures of housing affordability, which typically compare housing costs to income and mortgage rates, the NAR study also considered the inventory of homes for sale at different price points. The study found that housing affordability has deteriorated over the past two years for all but the wealthiest Americans, and that the dwindling number of homes on the market has made homesbuying more difficult in each income bracket.

The Covid-19 pandemic has energized the housing market as buyers seek to take advantage of low mortgage rates and move into larger homes. But the supply of homes for sale, which was already abnormally low before the pandemic, has plummeted. Homebuilding activity slowed and many potential sellers delayed moving or were reluctant to sell.

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Americans of middle-class income levels have experienced significant declines in their purchasing power.

Click on here to continue reading on the Wall Street Journal.