Source: The Hill —
A new report showing inflation rising again in September is just the latest bad news for new homebuyers, who are increasingly seeing the cost of a first home pushed out of their reach.
The latest news puts lenders, already on edge amid a grim economic outlook, on high alert as they look to further cut costs and avoid mortgages that might end up in delinquency.
As a result, buyers are going to find it increasingly difficult to obtain a loan that enables them to purchase a quality home amid sky-high prices and mortgage rates.
Buying a home in January 2021 required roughly 19 percent of the median household income to afford the average home, Andy Walden, vice president of enterprise research at the data analytics company Black Knight told The Hill.
“Today, with 30-year rates nearing 7 percent, it requires 39 percent —more than twice the share —of that same median household’s income to make the mortgage payment on that same average home purchase,” Walden said in an email. “That’s simply made it unaffordable for many potential buyers, significantly shrinking the pool of potential buyers in the market.”
The Consumer Price Index released from the Labor Department Thursday found that inflation increased in September by 0.4 percent and 8.2 percent over the past 12 months.
