By Mary Carter
Eagle Times Correspondent
Over the course of 2023, only 15.5% of homes sold nationwide were deemed affordable for the average American family.
In a recent report from Redfin, the powerhouse online real estate site, it was revealed that 21% of homes sold in 2022 were regarded as affordable. Before the Covid pandemic, 40% were. These are eye-opening statistics.
Low inventory, stubbornly high prices and spiraling rates have contributed to the tension. Normally, higher interest rates push home prices down. However, homeowners who don’t really have to sell aren’t budging away from their low interest secured rates. Buyers who really have to buy have such a small source to draw from.
For example, here in Sullivan County, only 52 homes are currently available on the MLS. The median asking price is $484,500. At this figure, one would need to put $97,000 down to have a monthly payment, at 6.50 percent interest, of $2,452 a month. This requires an excellent credit score and annual earnings over $105,000 before taxes. The median income in Sullivan County hovers somewhere around $70,000.
To bring all this jargon even closer to home: the median household income in Claremont NH is $58,602. This translates, in rough numbers and down-payments, to being able to afford a home with an asking price of $275,000. This price cap reduces the 52 available homes in Sullivan County to 13. Of these 13 properties, six require some level of renovation, and one had suffered a fire.
Nationwide, a typical mortgage payment is $250.00 higher per month than it was a year ago. A monthly mortgage payment is considered affordable if it consumes no more than 30% of a family’s monthly income. In many parts of the country, incomes aren’t keeping pace with continuing rising costs in necessities such as food, utilities, insurances, and so on. The typical family today is at a clear disadvantage.
According to the U.S. Census Bureau, more than 35% of American households rent. Since the pandemic, rents have increased nearly 30%. In spite of this, it’s currently still more affordable to rent than buy.
High rents have their doom effects as well. Manchester’s WMUR reported that NH homelessness is up 50% over last year. The last time numbers were this severe was in 2008.
State Rep. Annie Kuster claimed that NH needed 90,000 housing units so that apartments and housing could be considered affordable again.
Kuster, a leading advocate in Congress to expand access to affordable housing, toured Claremont last August in support of her mission.
The good news is: things are improving. Mortgage rates have finally fallen below 7%, prompting more sellers to get off the fence. Lawrence Yun, Chief Economist of the National Association of Realtors forecasts that home sales will increase nearly 14% in 2024 with an average mortgage rate of 6.3%.
Yun believes that the Midwest will become our country’s most affordable sector. The closest area to the Twin States that Yun sees producing positive results is the Portland-South Portland region of Maine.
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