The US economy is currently experiencing tough times. The nation’s economic anatomy is at a crossroads, and the bulging US debt ceiling continues to be a pressing issue. At the same time, the US housing woes are also deepening, with new metrics indicating that young people cannot afford to own a house in the States anymore.
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US Housing Crisis Deepens: What It Means For Homeowners In The United States?
The US housing crisis is worsening with each passing second. According to the latest post by the Kobeissi Letter, young people in the US can no longer afford to buy a house anymore. The post streamlined new age dynamics in the sector, where the average home buyer age has hit a new record high of 56, per a recent NAR study.
Earlier, the average homebuying age was nearly around 45 in 2021 and 39 in the year 2000. The post further outlines a striking analysis, explaining how over the last 3 years, the median age of repeat buyers has risen from 56 to 61 and from 33 to 38, both hitting new highs at the same time.
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The primary reason for this change can be attributed to the high interest rates as record-soaring prices continue to worsen the US housing domain. The development has intensified to the extent that young people cannot afford to own a house anymore, adding more pressure to the consumer’s mindset in general.
“Young people can no longer afford to buy a home. The typical homebuyer age has hit a new record of 56 years old, according to the NAR study for transactions between July 2023 and June 2024. This is compared to the typical age of 45 years old seen in 2021 and 39 in 2000. Over the last 3 years, the median age of repeat buyers and first-time buyers rose from 56 to 61 and from 33 to 38, respectively, both hitting all-time highs. Buyers are getting older as record-high prices and elevated interest rates have contributed to the worst buying conditions in history. US housing affordability is a crisis.”
Home Prices Gone Rogue
The portal further shared another interesting analysis, stating that the prices of US houses have massively outpaced wage growth over the last 5 years.
The US house prices have lately been soaring at a rapid pace, surging nearly 57% in the process. The portal succinctly shared that the house price growth has now exceeded “twice” the general salaries in a new development.
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“US house prices have massively outpaced wage growth over the last 5 years: Since 2020, house prices have skyrocketed by 57% and are sitting at all-time highs. At the same time, average hourly earnings have risen by just 28%. In other words, house price growth has been twice as much as the salaries. This is an even larger divergence than during the 2006 housing bubble. Housing affordability is somehow still getting worse.”