Housing affordability is an INTERNATIONAL issue.
median-priced single-family homes and condos are less affordable in the third quarter of 2023 compared to historical averages in 99 percent of counties around the nation with enough data to analyze. The latest trend continues a two-year pattern of home ownership getting more and more difficult for average U.S. wage earners.
The report shows that affordability has worsened across the nation amid a third-quarter increase in home prices and home-mortgage rates that has combined to help push the typical portion of average wages nationwide required for major home-ownership expenses up to 35 percent.
The latest number is considered unaffordable by common lending standards, which call for a 28 percent debt-to-income ratio. It marks the highest level since 2007 and stands well above the 21 percent figure from early in 2021, right before home-mortgage rates began shooting up from historic lows.
Home ownership keeps getting tougher for buyers as average 30-year home-mortgage rates in the U.S. have risen above 7 percent, from under 3 percent in 2021, and home prices have increased again in the third quarter of this year. The nationwide median price of single-family homes and condos is up 2 percent from the second quarter, to a new record of $351,250. Typical values around the country have gone up for two straight quarters, from a fallback that lasted from the middle of 2022 into early 2023 and threatened to end the extended boom that has buoyed the U.S. housing market for 11 years running.
Those latest price and interest rate hikes, along with other forces, continue to push the typical cost of major ownership expenses up far faster than wages, resulting in declining home affordability.
Even though housing affordability is an international issue, there are opportunities for uniquely Canadian solutions.
What are we doing to limit foreign ownership of properties?
How can we make vacant property more productive?