Home prices have been steadily rising in many parts of the country since the Great Recession in 2008, but affordability has been on the rise since 2016.
The report indicates that prices increased by 6.3 percent from 2019 to 2020, and homes are now more affordable than last year. This was due to a combination of relatively low mortgage interest rates, increased supply, and the government stimulus packages implemented during the pandemic.
As of December 2020, the median home price was about $320,000 across the country, making it more accessible to more Americans. Lower-priced homes continued to be in high demand, as well as starter homes, leading to higher home price increases. At the same time, inventory of existing homes for sale is 20 percent higher than it was in 2019.
In addition to the overall affordability of homes, the The Mortgage Reports report highlighted the disparities between different parts of the country. In the Midwest and West, housing affordability increased significantly, with some cities posting double-digit gains from 2019 to 2020. In contrast, the Northeast, South, and coastal California experienced more modest gains, with some areas even experiencing drops in affordability.
Despite the overall improvement in affordability, some potential homebuyers are still facing financial and other obstacles to buying a home, such as high unemployment and difficulty obtaining financing. Additionally, racial disparities continue to limit access to homeownership, especially among African American and Latinx households.
Overall, the housing market in the United States is becoming more affordable, although there are still challenges and disparities that need to be addressed. The combination of relatively low mortgage interest rates, increased supply, and government stimulus initiatives have made housing more accessible for many Americans. As long as these factors remain in place, the housing market should continue to be an attractive option for those looking to buy a home. However, additional steps must be taken to ensure that all potential homebuyers have access to affordable housing and the financial resources needed to purchase a home.
This article was contributed on Oct 23, 2023
