: Housing affordability hits a 39-year low. ‘It’s fair to expect prices to weaken,’ expert says.

by | Nov 7, 2023 | Stock Market

It’s an unwelcome blast from the past — home buyers are facing the most unaffordable housing market since the 1980s, according to a new report. With mortgage rates at 23-year highs, the monthly principal and interest payment on a median-priced home hit a record high in October. That puts the U.S. housing market at its least affordable since 1984, according to a report by Intercontinental Exchange, or ICE

The principal and interest payment on a mortgage, which excludes taxes, insurance, and homeowners association fees, surpassed $2,500 in October for the first time since 1975, when the company began tracking the data. Compared with the prior month, the payment went up by $144.  See also: A record share of Americans say it’s a ‘bad time’ to buy a house, as frustration with the housing market simmers: Fannie Mae The typical monthly P&I payment is up 94% over the last two years, rising by $1,240. The rate on a 30-year fixed-rate mortgage was averaging 7.76% as of Nov. 2, according to Freddie Mac. For the typical household, the principal and interest payment now amounts to roughly 41% of their income. That’s a significant shift from the last 35 years, when the share of income households needed to cover their P&I payment was less than 25% on average, ICE added.  “Affordability pressure is not coming from interest rates alone, though,” Andy Walden, vice president of enterprise research at ICE, said in a statement. He added, “The last time affordability was this bad in the 80s, rates w …

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