RALEIGH, NC — If you’ve been scrolling through Zillow, dreaming of homes lately (just me?), you’ve probably noticed a slight shift in the housing market. You are not crazy.
Harvard researchers have just released their new report: The state of the nation’s housing 2022.
What do you want to know
- Harvard University’s Joint Center for Housing Studies released its latest report: The Housing State of the Nation 2022
- Overall, researchers say higher interest rates have eased the home buying process, but economic challenges loom
- Economist and NCCU professor Henry McKoy says rising interest rates put in place to fight inflation have made it even more expensive for people to find housing
They say higher interest rates are taking some of the heat off the home buying market. And that’s good news if you’re a tenant. Researchers say construction is picking up, which means new apartments are being built. This should provide some rental relief when you open your next rental contract.
However, home price appreciation reached a national high of 20.6% in March 2022, a mark that the say the researchers is the highest in three decades of record keeping.
If you want to afford a home at the median price, which is quoted at $340,700, the household income requirement rose to $107,500. Last year, that figure was $79,570.
When looking at the economy as a whole, the report says soaring prices for gasoline, food and other basic necessities are really hitting people and businesses. In addition, most emergency government pandemic aid has come to a screeching halt.
The report found that low-income renter households and renter households of color were disproportionately likely to fall behind on rent, indicating that 24% of black renter households were behind on rent, as were 18% of Hispanic households, 18% of Asian households and 10% of white households.
Dr. Henry McKoyeconomist and professor at North Carolina Central University, says rising interest rates are making it harder to buy a home.
“It’s tough. We know that traditionally the idea of owning a home has been the foundation of the American dream,” McKoy said. “It’s getting a lot harder for people to achieve that dream.”
“With the current interest rate raised by the Federal Reserve in an attempt to slow inflation, the compensation is that [it] It makes it more expensive to buy a home for people who can’t afford it anyway,” McKoy said. “The other aspect of affordable housing is not only the cost of housing, but also people’s income. So hopefully we can increase people’s incomes so that more people can afford to move into houses.
Alexander Hermann, senior research analyst for the report, wrote, “Without help from family or other sources, this would exclude 92% of renters, whose median savings are just $1,500.
Despite all of these discouraging factors, the report says the short-term outlook for housing demand is still largely positive. However, a lot depends on inflation and avoiding a recession.
“There is also the long-standing challenge of producing affordable homes, given the high cost of building materials and land, as well as labor shortages,” says Chris Herbert, chief executive of the center. . “Lessons learned during the pandemic have led to a number of proposals to significantly expand the housing safety net and provide more support for first-generation buyers. Although these measures have not yet been implemented, it is important to continue the political debate on the best approaches to make housing affordable for all.