Along with owning your vehicle outright, buying your first home is one of the main milestones in a person’s life. Seen by many as the security and fortress of solitude that means you have something reliable and a secure investment. It’s a serious accomplishment that takes a lot of work to accomplish. Sadly enough, this has become more of a dream in the US.
Recently, Bankrate surveyed 2,300 adults, and 864 claimed they wanted to own their own home. Of that, 54% reported that they simply don’t make enough to buy a home. As home and mortgage rates surge, the hill toward homeownership gets even steeper. Currently, the average home price in the US is $379,100 as of January- a 5.1% jump from the year prior. Pair that with 7% mortgage rates, and according to Redfin’s estimates, you’ll need to clear 115k to afford that home. Assuming a 20% down payment and not going over the 30% of income rate that most mortgages require.
The 20% down payment is a major barrier for many, with Bankrate reporting 51% citing down payments and closing costs as a bar to ownership. Another 18% report credit-card debt as the problem, a lack of family assistance makes up 15% of the reason, and 10% cite student-loan debt.
Companies like Blackrock and Vanguard are buying up homes at inflated prices and driving up the “value” of neighborhoods and entire cities. Once they buy up properties, they then rent them out at even higher rates. This forces other landlords to raise their rental rates and also drives up the prices of other properties in the area. Naturally, people who can move and pocket a profit often look for a new place to call home and cash in on the market. Now, the market once again perpetuates itself higher.
At this rate, within a decade, many Americans won’t be able to afford anything to buy or even rent. Thank you, Joe Biden, you set the nation up for failure at what used to be even the most pedestrian of accomplishments.
