The Power Is Now Magazine | July, 2022

Page 16

POWER LENDING

Housing affordability has collapsed in 2022, according to a new report

R

eal estate has drastically changed between the years 2021 and 2022. The change in the Real estate market resulted from trying to rise from the economic downfall of Covid 19. Since then, the U.S has recorded an increased number of people who intend to buy houses. On the other hand, homeowners are reluctant to sell their property and have withdrawn property from the market. Most people are unsure whether employment will go back as it used to be before the pandemic, which might be why people do not want to sell out mortgages. Supply of houses does not meet the increasingly high demand that has resulted in unaffordable housing in the United States of America. After studying the real estate of the U.S economy, Chris Flanagan and his team at the BOFA Global Research claimed that housing affordability is collapsed. Recently home prices in the U.S have been increasing by the day as the market continues to experience high mortgage rates. Almost all areas of the United States have been affected by the issue. After Covid 19, house prices increased first in the expensive cities such as San Fransisco. People moved from expensive cities to the suburbs, which was a cheaper option. Eventually, all parts of the United States were affected, thus the unaffordability in coastal areas and the suburbs. The BOFA team now compares the current situation to how it was in the last three months in 1987 and from January to March 2005. During those years, the U.S.A recorded low affordability in the real estate as it now is.1987 experienced 16 | JULY 2022

a stock crash normally called “black Monday”, which then led to high mortgage prices. In the trading session, about 22% was tumbled by Don Jones’s industrial average. It led to the emergence of subprime morgages in the market where interest rates were above the fixed rate. The effect of increasing the home price was evident from 2000 to 2005. The year 2005 recorded the highest price of mortgages in the market. The real estate sector in 1987 experienced a problem when the number of available houses to be sold went down by about 30%. The drop in the number of mortgage available for sale increased further when the interest increased above the fixed rate (subprime mortage), which affected the economy and went up to 45%. With the above information, Flanagan concluded that there are chances of a 35% decline in the number of homes available for sale in 2022. In March this year, prices of mortgages increased by 20.6% annually. The data indicated that there are possibilities prices are at peak, mind you, that factors such as appreciation the low mortgages races that have disappeared since then. The 20.6% percentage in increase could probably be the reason why most homes in the U.S are considered unaffordable and the high inventory levels. Low mortgage rates negatively


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Articles inside

Top ten maintenance tips for first-time homeowners, by Steven Rivkin.

10min
pages 125-134

Can you offer less on the house? Lowballing and negotiating like a pro in Newburgh, by Sandra Cotthaus.

4min
pages 121-124

How much home can I afford in San Francisco?, by Norman Green.

4min
pages 117-120

Nashville housing market Q3, 2022 by Marqueze Williams.

4min
pages 111-113

How much does it cost to buy a home in El Cajon?, by John Costigan.

4min
pages 107-110

Are you truly ready to downsize?, by Rose Ogbonna.

4min
pages 114-116

Buy or build in Denton…Which is cheaper?, by Janet Petrozelle.

4min
pages 103-106

The home closing process for home sellers, by Harriet Robertson.

4min
pages 99-102

Real Estate best practices, by Edwin Engelke.

3min
pages 91-94

5 low-cost ways to get your home ready to sell, by Connie Watson.

4min
pages 88-90

Stay Ahead of Competition: Getting Mortgage Pre-approval, by Briana Frazier.

4min
pages 85-87

Should I Waive Home Inspections?, by Serina Lowden.

4min
pages 81-84

Corona Market Update: Market overview and Forecast for Q3, 2022, by Kamesha Keesee.

4min
pages 77-80

Let’s Clean up your credit score before buying!, by Jenny Gonzalez.

4min
pages 69-72

Is it advisable to max out your budget to buy your first home in Silicon Valley?, by Ian Batra.

4min
pages 73-76

Here are the five most important questions to ask before buying a home in an HOA area, by Heith Mohler.

4min
pages 51-54

Karen Hatcher, The Four Ways Real Estate Helped Me Create a Life of Sovereignty.

12min
pages 58-68

Riverside Market Update and Market Appreciation Data for Q3, 2022, by Ruby Frazier.

4min
pages 55-57

The highest offer is not always the best offer!, by Walter Huff.

4min
pages 47-50

Payson Real Estate Market Update, by Tamra Lee.

4min
pages 43-46

A big win for the Clean Energy Agenda

4min
pages 8-9

Expect the unexpected, by Gary Acosta

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How home purchase boosts consumer spending.

8min
pages 12-15

Scottsdale Real Estate Market appreciation data. Market summary, by Yvonne McFadden.

4min
pages 39-42

Top 10 Property Technology Trends Innovations for 2022.

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Here are 5 costs a homebuyer should be considering from the start, by Sharon Bartlett.

4min
pages 27-30

Housing affordability has collapsed in 2022, according to a new report.

4min
pages 16-17

The economy is strong! But Can People Afford Homes?

4min
pages 10-11
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