As a new homeowner, I found myself reflecting on the New York Times article about home prices and mortgage rates. The article discusses the perfect storm that has led to a housing market that feels increasingly out of reach for many.
The article highlights the growing gap between home prices and wage growth. While home prices continue to rise, wages have not kept pace, making homeownership a distant dream for many. During my own home search, I was aware of how competitive the market had become. There was a sense of urgency to secure a home before rates increased further. This pressure was not just about finding the "perfect" home but also about acting quickly before the financial burden became even…
The article I read, called “Can Home Prices and Interest Rates Soar at the Same Time?” by Emily Badger and Quoctrung Bui, explains a trend where mortgage rates and home prices are increasing during the same period and making it difficult to buy a house. Higher rates would typically lower prices, but the housing shortages and rising rents keep the demand high. Buyers are trying their best to buy a house with a reasonable interest rate as the market value increases and the demand decreases. At the same time, homeowners stay put in their current homes to avoid higher mortgage rates. This article also explains how supply and demand contribute to this unusual situation. It is clear that there is…
The Article I read was “Can Home Prices and Interest Rates Soar at the Same Time?” by Emily Badger and Quoctrung Bui. They discuss how during the pandemic, mortgage interest rate and house prices decreased. Which led to individuals purchasing more homes as they became more affordable. However, due to house shortage and inflation, rates and prices have skyrocketed. As you can see in the article, interest increased by over 1% and the median home sale price was $390,000 in 2022. This technically means the household would need to be bringing in over 80K when the average American salary is around 60K. In many years, renting was the affordable alternative to purchasing a house, but prices are steadily increasing, and…
This was an article from April 2022, which means that it was around less than a year since NYC Public Schools have opened up their buildings for in-person learning. Beginning the article, it was highlighted that interest rates dropped during a widespread epidemic and then quickly rose back to original rates. Home prices, on the other hand, kept rising. The result is monthly mortgage payments grew with a steep slope as compared to the 5-year trend. I'm not an expert on mortgages, so I wanted to quickly note the data. Anyways, I still plan on being a homeowner sometime in the future, so the article describing that the US having a severe housing shortage and rising home prices concern me…
Is there such a thing as a quadruple factor? If not, this is definitely one! What the housing market is experiencing has never been seen before, i.e., a shortage of supply, high-interest rates, increased housing pricing, and high inflation. Wow! Usually, what occurs in “normal times” is when interest rates are high to balance the market, housing prices are low—the classic demand and supply and reaching equilibrium. The Feds hoped that if they increased interest rates, the cost of borrowing would increase, and that would corral the market by slowing spending. It simply hasn’t worked for the housing market, and that is in large part because of the COVID-19 pandemic. The work-from-home phenomenon, employees looking for better work-life balance, and…
As a new homeowner, I found myself reflecting on the New York Times article about home prices and mortgage rates. The article discusses the perfect storm that has led to a housing market that feels increasingly out of reach for many.
The article highlights the growing gap between home prices and wage growth. While home prices continue to rise, wages have not kept pace, making homeownership a distant dream for many. During my own home search, I was aware of how competitive the market had become. There was a sense of urgency to secure a home before rates increased further. This pressure was not just about finding the "perfect" home but also about acting quickly before the financial burden became even…
The article I read, called “Can Home Prices and Interest Rates Soar at the Same Time?” by Emily Badger and Quoctrung Bui, explains a trend where mortgage rates and home prices are increasing during the same period and making it difficult to buy a house. Higher rates would typically lower prices, but the housing shortages and rising rents keep the demand high. Buyers are trying their best to buy a house with a reasonable interest rate as the market value increases and the demand decreases. At the same time, homeowners stay put in their current homes to avoid higher mortgage rates. This article also explains how supply and demand contribute to this unusual situation. It is clear that there is…
The Article I read was “Can Home Prices and Interest Rates Soar at the Same Time?” by Emily Badger and Quoctrung Bui. They discuss how during the pandemic, mortgage interest rate and house prices decreased. Which led to individuals purchasing more homes as they became more affordable. However, due to house shortage and inflation, rates and prices have skyrocketed. As you can see in the article, interest increased by over 1% and the median home sale price was $390,000 in 2022. This technically means the household would need to be bringing in over 80K when the average American salary is around 60K. In many years, renting was the affordable alternative to purchasing a house, but prices are steadily increasing, and…
This was an article from April 2022, which means that it was around less than a year since NYC Public Schools have opened up their buildings for in-person learning. Beginning the article, it was highlighted that interest rates dropped during a widespread epidemic and then quickly rose back to original rates. Home prices, on the other hand, kept rising. The result is monthly mortgage payments grew with a steep slope as compared to the 5-year trend. I'm not an expert on mortgages, so I wanted to quickly note the data. Anyways, I still plan on being a homeowner sometime in the future, so the article describing that the US having a severe housing shortage and rising home prices concern me…
Is there such a thing as a quadruple factor? If not, this is definitely one! What the housing market is experiencing has never been seen before, i.e., a shortage of supply, high-interest rates, increased housing pricing, and high inflation. Wow! Usually, what occurs in “normal times” is when interest rates are high to balance the market, housing prices are low—the classic demand and supply and reaching equilibrium. The Feds hoped that if they increased interest rates, the cost of borrowing would increase, and that would corral the market by slowing spending. It simply hasn’t worked for the housing market, and that is in large part because of the COVID-19 pandemic. The work-from-home phenomenon, employees looking for better work-life balance, and…