In This Article:
Yahoo Finance host Julie Hyman reviews the latest data out from Strategas, illustrating how mortgage payments have more than doubled over the past five years, adding to the long-existing home affordability crisis in the US.
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Well, the average estimated monthly mortgage payment has more than doubled in just over five years. And Yahoo! Finance's Julie Hyman joins us now with a closer look in our chart of the day, Julie.
Homebuyers have patiently been waiting for relief on the mortgage rate front, and it hasn't really arrived. And this is, uh, feeling its way throughout the system in a number of different ways. But let's get to the chart, first of all, because this comes to us courtesy of Strategas. They're looking at a 30 rate, uh, 30-year fixed rate mortgage. They're looking at the median home price. You add them up, and what you get as of April was a monthly payment of over $2,600, which, indeed, is a more than doubling from where it was at the end of 2019. And this sort of explains why we have seen some of the dismal numbers coming out of the homebuilding industry. Just today, the National Homebuilders, uh, coming out with their confidence index. It was the lowest since late 2023. Uh, tomorrow, we're going to get how- housing starts numbers, we're going to get building permits numbers. And this is also why, one of the many reasons why there's so much focus on the Federal Reserve and what they're doing with rates, because rates tend to be indexed to what we see for mortgage rates. Now, Ryan Grabinski over at Strategas writing, housing has an affordability problem. And this chart makes it very obvious why that is a problem. He also points out that when you look at lower income consumers, when you start to go up the income spectrum, the balance of people's net worth tilts more towards other types of assets besides real estate, namely stocks. On the lower end of the income spectrum, a lot of people's net worth tends to be tied up in their home. So if there is a freeze on new home buying, for example, if there are not new people entering the market, for example, that can be a problem throughout the economy. It's also, by the way, all of this is a problem for home building stocks. I was taking a look at some of the returns. Here you got the year to date, just equal waiting it, so you can see the red here that we are seeing across the board for many of the homebuilders which have been experiencing a lot of pain here. A lot of them have been offering incentives to get people into homes.
