October 2021 saw the median new home sale price in the United States rise to a record 5.56 times the median household income. Consequently, the relative raw affordability of new homes fell to an all time low as rising new home prices once again outpaced the growth of median household income:
30 year conventional mortgage rates rose in October 2021. At at average 3.07% during the month, they are nearly 0.4% higher than their record low from December 2020. Combined with the rising median sale price of new homes, mortgage payments for a typical new home sold as a percentage of median household income also became less affordable in October 2021.
The mortgage payments for a median new home rose to 29.0% of median household income in October 2021. That's up from the low of 24.5% recorded at the bottom of the Coronavirus Recession in April 2020.
References
U.S. Census Bureau. Median and Average Sales Prices of New Homes Sold in the United States. [Excel Spreadsheet]. Accessed 24 November 2021.
Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 24 November 2021.
Labels: personal finance, real estate
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