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Wednesday, August 17, 2022

Harvard study: warns that millions of Americans will be kicked out of the housing market

As time goes on, more and more American citizens are moving away from access to housing. it is indicated by Harvard University’s annual report on housingIn the midst of an unpleasant scenario for those wishing to acquire property.

The macroeconomic context in the United States links the various factors that plague the real estate market. First, Inflation in the country reached the highest record of 40 years After an annual growth of 8.6% recorded in May.

It is added, secondly, rising home purchase price, which also hit the ceiling in the historical series. Of the top 100 real estate markets, 67 have seen record growth in the past year. In the remaining 33 markets, home prices increased by at least 9%”, the report details. However, experts see a light at the end of the tunnel and expect a gradual decline in prices in the times to come. or at least growth will slow down.

The origin of the problem lies in the rise in mortgage interest rates due to inflation and the low saving capacity of middle-class Americans.Shutterstock – Shutterstock

Third, the rise in the rate of inflation prompted the US government to adjust Rate of interest For those who bet on buying a home, it takes them further beyond the finish line. From December to April, rates increased by 2%, an amount equivalent to a 27% increase in home prices. On a year-on-year basis, the interest increased from 3.06% in April 2021 to 4.98% in April this year. Over this period, the value of the median-priced home increased from $340,700 to $391,200. As Nordelta creator Eduardo Costantini elaborated in an interview with La Nacional: “This situation had repercussions and the latest data on the market for properties aimed at the central regions indicates that There was a decline in the number of operations of about 20%, Which is very high with 20% higher price level as compared to last year”.

saving potential This is one of the factors that influence the crisis the most. To have a reference to income, Minimum Required Wage US$107,600 . reached, Taking that amount into account, the report specifies that Deposits reached US$27,400 to enter the first home in Aprilwho represent About 7% of the total price. “This data Directly exclude 92% of tenants, Those who have an average of $1,500 in savings. The study noted that monthly mortgage payments on an average-priced home would reach $2,020 a month.

The study concludes, “As prices have risen along with interest rates, the income and savings required to obtain a home loan have increased.” The sum of these factors, as indicated, is This puts about four million citizens out of the market.

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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