US homes are least affordable since 2008

[William Hull]

United States home prices have been steadily rising since 2008. As of today, in 2017, they have reached their highest levels to date since the housing bubble burst in 2008. This in turn has caused many, if not most, homeowners to hold off on purchasing a new home at this time, as the affordability of new homes is at a century wide low. Today, the average home price in the United States has risen to over $250,000, and this is clearly a price tag that most Americans are unwilling to pay at this time. It appears to also be the case that most Americans have not recovered financially themselves from the housing and overall economic crash of the late 2000 Bubble Burst. This combination of a rapidly rising housing market as well as a depressed job market has most likely also contributed to the slowing of new home purchases in the past four to five years, where it has now reached its apparent apex here in 2017. Another key factor in the slowing of new home purchases has been the recent rise in interest rates, something that had been held steady at nearly zero levels for the past decade. All of these factors together contribute to the fact that new home purchases are lagging as we near the end of the 2010s.

Key Takeaways:

• Home affordability in the US is at the lowest point in the last decade.
• This is caused due to increase in home price, slow increase and mortgage interest rate.
• 210 out of 464 US counties are less affordable than historic affordability norms.

"ATTOM’s US Home Affordability Index dropped to 100 in the second quarter of 2017. That’s the lowest level observed since third quarter of 2008, when the index dipped to 86."

Read more: http://www.mpamag.com/news/us-homes-are-least-affordable-since-2008-72023.aspx