That’s how much of the average monthly income is spent on new homeownership costs—a figure that’s now at its highest level since the housing bubble of 2007, a new report showed.
The percentage of the average income taken up by the costs of owning the median newly-purchased house, including mortgage payment, property taxes, and insurance, has jumped dramatically to 31.5% from 26% in the first quarter of 2022 and 23.9% in the second quarter of 2021, according to a new report released Thursday from real estate data company ATTOM. That’s the fastest quarterly and annual jump since at least 2000, according to ATTOM’s data, and the new level is well above the 28% considered affordable by lending standards. The calculation assumes a median-priced home of $349,000, an average wage of $67,587, and a 20% down payment.
Homeownership costs have been driven sky high this year by both mortgage rates spiking over 6% from record lows reached during the pandemic, and upward-spiraling home prices, although there are recent signs that you might soon get a break from those cost increases.
“With interest rates almost doubling, homebuyers are faced with monthly mortgage payments that are between 40% and 50% higher than they were a year ago—payments that many prospective buyers simply can’t afford,” Rick Sharga, executive vice president of market intelligence at ATTOM, said in a press release.
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