Arbor Realty Trust’s Post

Nationwide, home affordability has declined sharply since 2021 in every state, as higher mortgage rates and stubbornly high prices pushed ownership out of reach for many prospective homebuyers. But a breakdown of how affordability differs across the election map, and in the seven key battleground states, sheds light on how voters might respond to the candidates’ pitches on this key issue.

Housing Affordability Reaches Lowest Point in Over Three Decades "...In July 2023, the Real House Price Index (RHPI) jumped up by nearly 17% on an annual basis, bringing housing affordability to the lowest point in over three decades. Two factors drove the sharp annual decline in affordability: a 4% annual increase in nominal house prices and a 1.4 percentage point increase in the 30-year fixed mortgage rate compared with one year ago,” said Mark Fleming, Chief Economist at First American. “For homebuyers, holding prices constant, the only way to mitigate the loss of affordability caused by higher mortgage rates is with an equivalent, if not greater, increase in household income. Even though household income increased 3.7% since July 2022 and boosted consumer house-buying power, it was not enough to offset the affordability loss from higher rates and rising nominal prices." #affordability #housing #mortgagerates #economy The MReport Richard Martin _____________________________________________________ If you want to immediately see new content that I post 👉🏻 Ring my bell (🔔) and follow #informationbanker or if you want to get the posts that got noticed in my weekly What’d I miss newsletter, subscribe here: "https://lnkd.in/d5_KvWwu"

Housing and Income continues to be a big topic as we move towards the end of the year. With the Federal Reserve projected to conduct interest rate cuts in 2024, could that barrel effect be seen within the affordability of homeownership? The income needed to afford an average home in the US hits a record 41.4% in 2023, which is up from 21.1% in 2012 and 28.5% in 2020, according to @Redfin. In 2023, someone making the median income in the U.S. – $78,642 – would've had to spend more than 40% of their income on monthly housing costs if they bought the median-priced home, which was around $400,000, according to Redfin. That's the highest share in Redfin's records dating back to 2012, up nearly 3% from last year. Homebuyers are spending nearly 60% of their income on home payments, via the “post-tax” basis. A homebuyer would need to make at least $110,000 per year to spend 30% or less of their income on home payments, this number could vary by market. The American Dream has been renovated due to the lack of affordability that we are seeing in areas from homes to just a comfortable life. The average American is being priced out and being forced to wake up from their dream to put their own dream into process. Supply for housing and materials are are historic lows and even if the rates would revert — could this be the thing to bring down the overall sticker shock? Spending 60% of your income to purchase a home at a time where the only thing cooling off is the temperature is scary to think about. This isn’t sustainable no matter how the flip the hammer. #housingmarket #homeownership #consumerspending #economy

Useful corrective here to the dominant narrative about U.S. homeownership

"Ladies and gentlemen, boys and girls, let's talk real estate! Picture this: the housing market, a rollercoaster of ups and downs, twists and turns, but fear not! We're riding this wave together. According to ATTOM's latest report, while home prices may be doing the cha-cha with affordability, there's still hope glimmering on the horizon.In the first quarter of 2024, we've seen median-priced homes and condos remain less affordable compared to historical averages. But hold onto your hats because there's a silver lining. With the typical cost of mortgage payments, homeowner insurance, mortgage insurance, and property taxes hovering around 32.3% of the average annual wage, there's room for a little financial shimmy.Sure, the top 20 counties on the northeast and west coasts may be hogging the spotlight when it comes to major ownership costs, but guess what? We're seeing slight quarterly improvements! That's right, folks, improvement is the name of the game. Despite the housing market's tango with our wallets over the past few years, we're seeing signs of resilience.CEO of ATTOM, Rob Barber, reminds us that while affording a home might feel like chasing unicorns for some, mortgage rates are coming down, and home prices are growing at a modest pace. It's like catching a break in a whirlwind of financial juggling. The upcoming Spring buying season might just be the cherry on top of this hopeful sundae.And let's talk numbers! While the national median home price has risen less than 2% this quarter, inflation is keeping its cool at less than half of what it was in 2021. That's music to our ears, folks!So, while homeownership expenses might still be doing the rhumba with our wallets, let's remember, we're in this together. With perseverance and a little financial footwork, we'll dance our way through this housing market adventure, one step at a time!"

Between 2015 to 2023, the U.S. added more than 4x more new homeowner households than we did renter households. This is an important datapoint that has gone largely ignored by policymakers and headlines fearmongering about the U.S. becoming a "renter nation" due to investor purchases of single-family homes. In fact, over these past nine years, we added more homeowners than we built for-sale homes-- which meant millions of single-family rentals were sold off to individual owner-occupants. Renter nation? Nah. Furthermore, the U.S. homeownership rate has increased 270 bps since bottoming out in 2016. Homeownership remains below the all-time highs of the bubble era, but also still above the long-term median -- and too few people are aware of the gains made since 2016, in part due to a deeply misleading narrative. Of course, some of these numbers might move backward in 2024 due to high mortgage rates and sticky home prices. But it's critical to understand that, over the past decade, headlines and policymakers grossly understated the resiliency of individual homebuyers. So, therefore, any potential change in direction will have little/nothing to do with boogeyman investors, and more to do with mortgage rates, home prices and ho-hum new construction numbers. #homeownership #housing #rentalhousing #SFR

Folks, the new year means a new legislative session will be starting, and New Hampshire has some key bills coming up! I keep saying, 2024 will be the year of Housing and we all need to pay attention. Need a compelling reason to keep abreast and connect with your local legislative representatives? Let's break down this article! 🏡📉 The housing affordability crisis is real, and it affects us all. Here's a snapshot of what's happening nationally: 📊 Only 15.5% of homes listed this year were affordable for a typical household 😨 . That's a stark reality! Affordability measured if monthly mortgage payments were within 30% of local median incomes, assuming a 5% down payment. 💸 Home prices skyrocketed post-pandemic, doubling average monthly mortgage payments in the last three years. This surge hits all-time lows for affordability, impacting our communities. 🤝 Minority buyers bear a heavier burden, facing significantly lower affordability rates due to lower incomes and wealth compared to white buyers. It's an unequal playing field. 📈 The reasons behind this drop? Soaring home prices, remote work shifting populations away from cities, sluggish home construction, and peaking mortgage rates at 8% in October, are all possibilities listed. 💡 But there's hope! Recent drops in mortgage rates (now at 6.67%) are nudging affordability up, leading to more home listings and some relief on older home prices. 🏗️ Construction of new homes is on the rise, offering a glimmer of hope for better affordability. Experts predict further interest rate decreases, though overall home prices might not fully revert to pre-pandemic levels. 🌟 The future of housing affordability rests on understanding these factors and advocating for change. Let's drive the conversation, push for initiatives, and create a more affordable housing landscape for everyone. Spread the word! #HousingDrought #AffordabilityMatters #ChangeIsPossible https://lnkd.in/eksNS4NR

U.S. Households Need $115K/year for Median-Priced Home By Kerry Smith In Fla., median income is less in six metros and higher in three, ranging from an $88.7K yearly income in Lakeland (up 13.4% year-to-year) to $143K in Miami (up 33.4%). SEATTLE – The average U.S. household must earn $114,627 to afford a median-priced U.S. home, up 15% ($15,285) year-to-year and more than 50% since the start of the pandemic – the highest annual income necessary to afford a home on record, according to a report from Redfin. In the nine Florida metros listed in the study, it’s more affordable in six and less affordable in three. A Lakeland family needs only $88,639 for a median home, though that’s still 13.4% more than they needed one year earlier. In Miami, that family needs $143,187 – a notably high 33.4% increase in one year. Miami’s year-to-year uptick was the highest in the U.S. Florida metro – Yearly income needed – Year-to-year change: Cape Coral: $108,249, up 16.9% Fort Lauderdale: $114,549, up 22.2% Jacksonville: $99,549, up 15.2% Lakeland: $88,639, up 13.4% Miami: $143,187, up 33.4% North Port: $123,888, up 17.4% Orlando: $108,597, up 18.5% Tampa: $103,613, up 17.3% West Palm Beach: $125,459, up 24.4% “In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high interest payments, but that’s not what’s happening now. “Buyers – particularly first-timers who are committed to getting into a home now – should think outside the box. Consider a condo or townhouse, which is less expensive than a single-family home, and/or consider moving to a more affordable part of the country or a more affordable suburb.”

In addition to the 86 million owned homes in the United States, 45 million people rent. According to the NY Federal Reserve, just 13% of those renters believe they can one day own a home. That's not surprising seeing as how the monthly mortgage payment for the purchase of a new home has more than doubled to over $2,100 from less than $1,000 around the time of Covid. While much ink is spilled over the cost of food at the grocery store and the increase in health care costs, the perceived inability to own a home is yet another issue politicians will have to wrestle with this election season. https://lnkd.in/eWK78uCm