CNN: Mortgage Rates Rise Again, Finishing the Year at 6.85%; Income Needed to Afford a Home Almost Doubled Since 2019

EXCERPT:

EGAN: “This is really the last thing that people needed, because it‘s not just that borrowing costs are high, it‘s that home prices are high. There‘s just too many people chasing too few homes and so prices have nowhere to go but up. We‘ve seen this across the country. In the northeast, home prices are up by 8% year-over-year , to almost $500,000. That‘s the median. In the west, the median home price is above $600,000. That‘s just the median. That means half of them are well above that price. Of course, this cuts both ways, right? If you already own your home, you‘re sitting pretty, you‘re smiling every time you‘re checking the value of your home on Zillow because it‘s padding your net worth and it‘s giving you some more financial flexibility, potentially to do a home equity loan or home equity line of credit. But we know that so many people just can‘t afford to buy right now. Oxford Economics has found that to buy a home and to afford property taxes and the cost of insurance, you need to make $108,000 a year as a household. That is almost double where this income level was supposed to be back before Covid. Back then, you needed to make $56,000 to afford to buy a home. Only 1 in 3 households today, Sara, actually make enough to afford to buy a home, and this is going to continue to be a problem until not just mortgage rates come down, but the supply of homes increases significantly."