Purchasing one’s dream home at an affordable price is becoming significantly more difficult due to skyrocketing mortgage rates and overall low inventory of houses. Almost six months into 2022, a catastrophic seller's market could be on the housing horizon.
In 2019, Congressional candidate Rebecca Parsons released information that revealed it was easier to buy a U.S. home in the Great Depression than in 2019. During the Depression, the median annual pay was about 22 percent of the cost of a home. In 2019, it was only 14 percent. This comparison confirms that it was easier to afford and own a house in one of the worst economic periods in American history than in 2019.
According to the Bureau of Labor Statistics, the median weekly earnings for a full-time worker in the first quarter of 2022 was $1,037. Adjust that to a year-long schedule, and the annual earnings amount to $49,776. According to the Federal Reserve Economic Data website, in that same quarter, the median cost of a house was $428,700. In comparison, that would mean the 2022 median annual pay was roughly 12percent of the price of a home, making this year on pace for one of the worst housing markets in history.
With this comes the horrific seller's market that consumes the real estate in America. No longer are houses selling in days, but now selling in merely hours. Full-time workers are getting paid about the same year by year but see the prices of homes skyrocket.
In addition, mortgage rates continue to skyrocket and eat into one’s paycheck every month, jumping from 2.96% in 2021 to anywhere between 4.8% and 7%, according to the Mortage Report. Now more than ever, individuals are almost required to have roommates to survive.
The problems extend beyond houses, as even apartment complexes become outrageous. Whether it is bettering its control over this market or increasing the standard livable wage, America needs to solve this crisis fast or deal with historic consequences.
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