Why more Americans can’t afford to buy homes
Hoping to move from renting to owning? Good luck.
US home prices continue to rise faster than wages, a situation that makes it increasingly difficult for those who hope to convert from shelling out monthly rent to investing in a home of their own.
The median price of an existing home in the US hit $244,100 in July, up 5.3 percent from the same month last year.
That’s about double the 2.6 percent increase that Americans saw in their average hourly earnings over the same time period.
Now, it’s worth noting that US housing affordability varies drastically depending on where you live. But a consistent problem seems to be lack of supply of the lower-priced homes that first-time home buyers typically purchase. (A smaller supply of houses in the face of stable or increasing demand means higher prices.)
And that helps explain why rates of homeownership — long a cornerstone of the wealth for America’s middle class — have hit record lows. US homeownership tumbled to the lowest level in five decades during the second quarter of 2016.