The cost to buy a house has ballooned because of rapidly rising prices and spiking mortgage rates, the latter a result of the Federal Reserve’s anti-inflation interest rate hikes. That’s priced many homebuyers out of the market. In April 2022, a family would have needed an annual income of $107,600 to afford the median mortgage payment on a newly-purchased home, up from $79,600 in April 2021, the Joint Center for Housing Studies of Harvard University estimated in a report this week. That’s put homebuying out of reach for some 4 million renters.With fewer people able to afford to buy homes, sales have slowed. According to some measures, prices have continued to rise at a rapid pace, but MBA’s data, which is based on real mortgage applications, has shown a significant deceleration in monthly mortgage payment increases. Economists at MBA predict the housing market will continue to cool down under pressure from rising mortgage rates. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
