Do you dream of owning a home, only to find the prospect slipping away?
It's not just the affluent neighborhoods facing this crisis. A recent study by MoneyGeek reveals that homeownership has become 'unaffordable' in 57 counties across the country, hitting the average family hard.
As home prices soar, outpacing income growth, the dream of owning a home becomes more elusive. MoneyGeek analysed real estate costs and income changes from 2021 to 2023, pinpointing 57 counties where homeownership has recently become out of reach for typical families.
The list now includes San Francisco exurbs and several Sacramento-area counties, as those priced out of the Bay Area sought refuge elsewhere. Places like Placer, Solano, and San Joaquin counties are witnessing home prices spike beyond attainability.
Moving up the West Coast, 10 counties in Oregon and Washington share the same struggle. Clackamas County, just outside Portland, has seen a staggering 33% increase in home prices in two years, according to MoneyGeek.
In Travis County, Texas, home to Austin, the state capital, the situation is dire. Home prices surged by nearly 50% since 2021, reaching a daunting median price of $610,000. The analysis focused on counties with populations exceeding 250,000 and experiencing above-average population growth.
Over the past two years, climbing interest rates compounded the struggle for homeownership. While economists predict a decline in the average rate on a 30-year mortgage this year, it's expected to stay above 6%. Despite a slight dip since October 2023, the current average rate remains significantly higher than the 3.22% of just two years ago.
This large gap in rates has discouraged homeowners, who secured rock-bottom rates, from selling, contributing to the challenge of low inventory and soaring home prices. Sam Khater, Freddie Mac's chief economist, acknowledges the relief of lower mortgage rates but highlights the persistent challenges of low inventory and rising home prices for potential homebuyers.
In a landscape where dreams of homeownership are increasingly shattered, the pain points of low inventory, high prices, and the struggle to secure a mortgage are palpable.
As the housing market fluctuates, the quest for a place to call home becomes an even greater challenge for many.
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