Payments Surpass Cost-Burdened Threshold As Affordability Sinks To Lowest Point In 35 Years

Housing payments have surpassed the dreaded 30% cost-burdened threshold thanks to the 30-year fixed rate’s recent half-point jump. Black Knight reports that it now costs $2,103 to make the principal and interest (P&I) payment on an average-priced home with a 20% downpayment. That equates to 36.2% of the median household income and sinks affordability to its lowest level in more than 35 years. Payments as a percentage of income are now higher than the previous record of 34.1% in July 2006, and significantly up from the long-term average of 25.1%. The Department of Housing and Urban Development defines cost-burdened families as those “who pay more than 30% of their income for housing” and “may have difficulty affording necessities such as…

Morning Roundup (4/21/2022)– Monthly Payments Up, Home Sales Down

Good Morning! Today is Thursday, April 21. Russia test-launched a new intercontinental missile that it said could carry several nuclear warheads. The federal government charged 21 people in Medicare fraud schemes, including selling fake vaccine cards and test results. The Mortgage Note Reports “Plenty Of Fuel In The Tank”: Monthly mortgage payments on the typical U.S. home are 19.5% higher than they were three months ago, but demand just keeps growing. Existing Home Sales: Existing-home sales fell for the second straight month in March, down 2.7% from the prior month and 4.5% from a year ago.  And in other mortgage and housing news… Blend Layoffs: Mortgage tech company Blend has laid off 10% of its workforce. BOA Settlement: HUD signed a Conciliation Agreement with Bank of America to resolve…

Rents, Mortgage Payments Jumped In February

Average monthly asking rent in the U.S. leaped to new heights in February, up 15% year-over-year to a record high of $1,901, though mortgage growth outpaced it yet again, according to Redfin. Rent growth saw its largest annual increase since Redfin began tracking rental data in February 2019. Mortgage payments rose 31% YOY to $1,716, also the biggest increase recorded by Redfin. Mortgage payment increases outpaced rent increases in 44 of the 50 largest U.S. metros. “The cost of housing is going up for homebuyers and renters, but it’s going up more quickly for homebuyers,” said Redfin Chief Economist Daryl Fairweather.  “That’s because mortgage rates have increased sharply, and will likely continue to do so. When the cost of homeownership…

Rents And Mortgage Payments See Record Growth

Both rent and mortgage payment price growth reached record highs in December, according to a new report from Redfin. Rents jumped to $1,877, 14.1% year-over-year (YOY) and the largest annual jump since at least February 2019, the earliest month in Redfin’s data. The national monthly mortgage payment rose 21.6% YOY, also the largest increase in Redfin’s data history. “The growth in mortgage payments has been driven by both climbing prices and climbing mortgage rates,” said Redfin Chief Economist Daryl Fairweather.  “And those rising mortgage costs push more potential homebuyers into renting instead, which pushes up demand and prices for rentals. Mortgage rate increases are accelerating, which will cause both mortgage payments and rent to grow throughout 2022.” The 30-year fixed-rate…

August Price Growth Makes History

Annual price gains reached an all-time high in August at 18.1%, according to CoreLogic’s Home Price Index (HPI) and HPI Forecast. It’s the highest twelve-month increase in the history of the index. Month-over-month, prices rose 1.3% compared to July. The HPI Forecast suggests that home price growth will slow to 0.3% from August to September and YOY 2.2% as continuing supply chain problems and competition from cash-rich investors deter potential buyers in the coming year. “Home prices continue to escalate at a torrid pace as a broad spectrum of buyers drive demand for a limited supply of homes,” said Frank Martell, president and CEO of CoreLogic. “We expect to see the trend of strong price gains continue indefinitely with large…