Harvard study: warns that millions of Americans will be forced out of the housing market
As time goes on, more and more American citizens are moving away from access to housing. This is indicated by the Harvard University Annual Report on Housingin the midst of an unflattering scenario for those seeking to acquire a property.
The macroeconomic context in the United States combines several factors that put the real estate market in trouble. First, inflation in the country reached the highest record in 40 years after the interannual increase of 8.6% registered in May.
To this is added, secondly, the rising house purchase price, which also hit ceilings in the historical series. Of the top 100 real estate markets, 67 have seen record increases at some point in the past year. In the remaining 33 markets, house prices increased by at least 9%”, details the report. However, specialists see the light at the end of the tunnel and foresee a gradual drop in prices in the coming times, or at least that the rises will slow down.
Third, the rise in the inflation rate led the US government to adjust Interest rates For those who bet on buying a home, this takes them further and further from the finish line. From December to April, rates increased 2%, an amount equivalent to a 27% increase in home prices. In year-on-year terms, interest went from 3.06% in April 2021 to 4.98% in April this year. In this period, the value of a median priced home increased from $340,700 to $391,200. As Eduardo Costantini, creator of Nordelta, had detailed in an interview with LA NACION: “This situation had repercussions and the latest data on the market for properties aimed at the middle sectors indicate that there was a drop in the number of operations of about 20%, which is a lot with a price level that is 20% higher than last year”.
The savings capacity It is another of the factors that most affects the scourge. To have a reference in terms of income, the minimum necessary salary reached US$107,600. Taking that amount into account, the report specifies that the deposit to enter a first home in April reached US$27,400which represent about 7% of the total price. “This data directly rule out 92% of tenants, who only have an average of $1,500 in savings. The monthly mortgage payment on a median-priced home would reach $2,020 a month,” the study states.
“As prices have risen along with interest rates, the income and savings needed to get a home loan have skyrocketed,” the study concludes. The sum of these factors, as indicated, it leaves some four million citizens out of the market.