Monthly mortgage payments in April took up 28% of a recent homebuyer’s monthly income, near the 30% threshold generally considered as “affordable,” says Zillow.
TALLAHASSEE, Fla. – Monthly mortgage payments in April took up 28% of a recent home buyer’s monthly income, which is near the 30% threshold generally considered an upward bound of affordability, according to a new Zillow report. That’s the highest share of income devoted to mortgage payments since at least 2007.
Zillow has dropped its forecast for home-price growth over the next 12 months as buyers grapple with the most unaffordable landscape in at least 15 years.
In the months since those numbers from April were recorded, mortgage rates and home prices have only continued to climb, even as wage growth has flattened out. As mortgage rates moved upward, the typical mortgage payment after a home purchase in early June would amount to $2,127 per month. That number has climbed 36% since the start of the year alone.
By Zillow’s count, the number of for-sale listings that went under contract last month was slightly lower than in May 2019 – before the pandemic began. Home sales activity declined 20% over the previous 12 months to pre-pandemic sales levels. Home values posted 20.9% year-over-year growth in May, down from 20.7% in April.
While prices are still expected to rise, Zillow has downgraded its forecast for the upcoming year from 10.4% growth to 8.8% growth.
Source: Inman (06/22/22) Houston, Daniel
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