Soaring Home Prices Leaving More Buyers Seeing Red

As home prices soar, we don’t need the WSJ to tell us “Mortgage Payments Haven’t Been This Unaffordable Since 2008.” And, that’s despite historically low interest rates on home loans. So, what good is cashing in on the ‘ol homestead if it takes Fort Knox to buy a new one?

Ironically, the newspaper noted, it’s the “record growth in home prices [that are] erasing savings typically delivered by low interest rates.” Nor are incomes keeping up: “The median American household would need 32.1% of its income to cover mortgage payments on a median-priced home, according to the Federal Reserve Bank of Atlanta. That is the most since November 2008, when the same outlays would eat up 34.2% of income.”

Those numbers added up to a recipe for financial disaster before the 2008 real estate market crash and they don’t look any more promising now.

Davd Soul