A new Redfin report shows that typical monthly payments for homebuyers in swing states have nearly doubled since the 2020 election. Redfin head of economic research Chen Zhao joins Wealth! to break down the report and why housing has become unaffordable for many Americans.
Zhao explains that the mortgage payment associated with a median-priced home in a swing state has risen 92% since 2020. "The reason for that is because home prices have gone up more than 40% and mortgage rates have more than doubled in that time. So that’s really driving the increase," she says. She adds that American families making the median household income would have to spend 33% of their income to buy a median-priced home, marking a 22% rise since 2020.
As the housing supply gets squeezed, buying a home has become much more expensive. While prices have risen in the past, Zhao explains that his increase is different:
"Home prices actually also went up a lot between 2016 and 2020. They also went up about 40%, as they did between 2020 and 2024. But the difference is that mortgage rates did not go up between 2016 and 2020, but between 2020 and 2024, we went from ultra-low mortgage rates to now high 6 to 7% mortgage rates. And that’s really driving the difference between those two time periods."
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