The US housing is now beyond reach for the average American as prices have skyrocketed in the last four years. According to a new report, 99% of Americans cannot afford to buy a house anywhere in the country. This includes even smaller counties and places that are far from the CBD areas. Data shows that prices of 575 US counties which were cheaper before have now become unaffordable after the pandemic.
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An average earner who makes $71,214 per year is not in a position to buy a house even in the most remote areas in the country. Even people making $407,100 a year are finding it difficult to own a house in both the cities and the countryside. The mortgage rates climbing above 7% in 2023 is also the cause to back off from owning a house. In addition, home sellers and real estate builders are charging exorbitant prices for basic housing in the countryside.
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Why is the US Housing Market Becoming Expensive to Average Americans?
The percentage of homeowners selling their properties has come down considerably after the pandemic. The development is making home prices skyrocket as the supply and demand mechanics don’t add up.
- First-time home buyers are backing off from owning a house due to high mortgage rates.
- Homeowners who want to sell their property are quoting double the price.
- Real estate builders are focusing on the rich and leaving the average working class in limbo.
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Therefore, the supply and demand dynamics to own a house are working against Americans every day. “The only people who are selling right now are people who really need to move because of a life event — divorce, marriage, new baby, new job, etc.,” said Daryl Fairweather, Chief Economist of Redfin to CBS MoneyWatch. “That lack of new inventory is keeping prices high,” he added.