As costs of home ownership rise, millions of Americans have been pushed out of the housing market, according to Harvard University’s annual State of the Nation’s Housing Report released Wednesday.
At today’s home prices, a first-time buyer would have had to shell out $27,400 (7 percent of the sales price) as a downpayment in April on a median-priced home, said the report. This rules out 92 percent of renters, who only have a median of $1,500 in savings. If the downpayment is halved to 3.5 percent, the monthly mortgage payment on a median-priced home would be $2,020.
“In combination with rising prices, the recent interest rate hikes raised the minimum income needed to afford these payments from $79,600 in April 2021 to $107,600 in April 2022—effectively pricing out some 4 million renter households with incomes in this range,” the report said….