It has been discovered that US mortgage payments have become almost unbearable, in half of the large housing markets in America.
As well as the rising mortgage payments, the price of homes has also been going up, sparking concern amongst many US citizens and tourists alike.
According to research, prices have gone up dramatically – the median price of a home now is higher than the median home value of all homes in all but three of the largest 35 metros. This property news is growing to be a huge concern for first-time buyers, for people who are trying to get on the property ladder and gain stability. With rising mortgage payments and rising home prices, getting on the property ladder seems almost impossible.
In the six largest California metros, the US mortgage payments here are simply too expensive. It has also been suggested that overall, mortgage payments on the median home for sale expect and need 20% of the median income. In Los Angeles, monthly mortgage payments on for sale homes require 46.8% of the median income.
A private report suggests that the reason why this real estate market has become too difficult to buy and invest in is that the homes available for purchase are, in general, more expensive than the median home value of all homes in the same market. Large down payments that come with high prices are a problem to home ownership and the US mortgage payments are taking up a large part of income too.
The houses across America have become so expensive, especially in the main and most popular cities. All of this doesn’t prevent tourists visiting America though, but it could have an effect on the rental market in the future. Affordability in an economy is so important, not only for the citizens but also for overseas visitors.
The down payments remain the biggest worry for home buyers but daily and monthly living costs are becoming unaffordable too. This is putting a big strain on US citizens as well as offering the potential of tarnishing the US reputation towards tourists. This is something that needs to be addressed before it’s too late – more and more people may be put off investing in America because the US mortgage payments keep rising. If prices of property become too unaffordable that it actually stalls the sales of property, then this can cause major consequences for the economy.
Written by Gemma Smith