Wealthy Living
The change comes after the Federal Reserve increased its fund rate in June 2022 (following previous increases), causing mortgage rates to rise too.
Since mortgage rates determine the size of monthly payments — and a buyer’s ability to afford a mortgage largely depends on whether monthly payments are within their budget — this is a huge blow to buyers.
Amid such difficult conditions, it’s only natural to wonder if a housing market crash will be the natural outcome. For one, many people will now be priced out of the market and forced to continue renting.
The average house price in the US is $507,800, so the drop in affordability means that even buyers with a healthy monthly budget of $2,500 will not afford the average property.