Connect with us

Hi, what are you looking for?


Nearly all of the homes listed for sale in 2023 were unaffordable

Less than one-sixth of homes listed in the U.S. between January and November were affordable for a typical household, according to Redfin.

The real estate brokerage says 352,500 homes, or 15.5% of the total that were listed in the first 11 months of the year, were affordable for a typical U.S. household.

Redfin considered listings affordable if the estimated monthly mortgage payment on that home was no more than 30% of the median income of the local county. It assumes a 5% down payment as well, which is close to the minimum many lenders will accept.

There are some limitations to the estimates: Some buyers are able to put down more than 5%, which reduces their mortgage payments, while many are willing to pay more than 30% of their income toward housing. And many buyers aren’t local.

Still, it’s become harder than ever to afford a home. Other metrics show affordability hit all-time lows in late 2023, while the average monthly mortgage payment in the U.S. doubled in the last three years.

That’s been especially bad for Black and Latino buyers, because on average they have lower income and less wealth than white buyers. Redfin says 21.6% of homes listed for sale were affordable for the typical white household, compared to 10.4% for Hispanic/Latino households and 6.9% for Black buyers.

There are two connected reasons for the drop in affordability. One is that home prices soared after the pandemic began as some people moved out of cities quickly, remote work increased and home construction slowed. The other is that mortgage rates have spiked since March 2022 as the Federal Reserve raised interest rates.

Federal Reserve data shows that 30-year mortgage rates rose from less than 4% in early 2022 to a peak of 8% in October. As rates jumped, fewer people could afford to borrow the money they needed to buy a home. Even if they could get a loan, their dollars did not go as far as before.

At the same time, people who already owned a home were less willing to put theirs up for sale, as that would have likely required them to take out a new mortgage at a much higher rate. That created a spiral of price increases that took several years to ease.

Redfin’s own calculation is that 50% of listed homes were affordable in 2013, the earliest year for which it has data. As recently as 2020, that number was 45% before plunging over the last few years.

Homes have become slightly more affordable in recent months as mortgage rates have decreased. Lender Freddie Mac says the average rate on a 30-year fixed is now 6.67%. That’s much higher than what buyers were able to get from 2010 to 2022, but it’s a notable decline from the peak in October.

It’s been enough of a change to get a few more buyers to put their homes up for sale, and that increase in supply has in turn put downward pressure on sale prices for older homes. Redfin says that should continue in 2024.

Construction of new homes is also on the rise, which should boost affordability to an extent. Interest rates and mortgage rates are expected to decrease further in the years ahead, even if overall home prices are unlikely to return to their pre-pandemic levels.

This post appeared first on NBC NEWS

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    Kim Jong Un attended a “paramilitary parade” with his daughter to mark the 75th anniversary of North Korea’s founding on Saturday, the country’s state...


    Target said Tuesday that it will close nine stores in major cities across the country, citing violence, theft and organized retail crime. The company will...


    A U.S. District Court judge Thursday blocked implementation of a new Idaho law that would prevent transgender students from using restrooms, locker rooms and...


    The Consumer Price Index hit 3.2% in July, compared with 3% in June, the Bureau of Labor Statistics reported Thursday. Once again, food prices...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2023