Orla McCaffrey
speaker
593 appearances
13 recordings
1 series
first heard Mar 2020
last heard Jun 2022
Orla McCaffrey’s voice in public audio — every appearance, attributed to the second.
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Appearances
massive increase in home prices that we've seen over the past two years.
This is also weighing on American households because according to the Federal Reserve Bank of Atlanta, the median American household would need to devote 34% of its income to cover monthly payments on a median priced home.
And that is the highest since November 2008.
So
A lot of families are really just being forced with hard choices, whether they are going to choose to stop looking for a house now until hopefully things become more affordable, or maybe they get some boost to their family income, or maybe they're just going to significantly lower their target price range to see if they can afford anything in their desired area.
And another interesting dynamic we're seeing right now is that prices are rising at the same time as mortgage rates, right?
So typically when mortgage rates rise at the pace we've seen them rise at, that weighs on demand from people who are trying to buy homes.
It pushes people who are maybe on the margins just out, right?
It makes almost any option unaffordable for them.
But it's kind of having a, I don't know, like an interesting psychological effect on people where people are noticing, people are 100% noticing that rates are going up, that they're going to have to pay hundreds of dollars more a month
in mortgage payments.
And that is kind of pushing them even harder into the market because they want to get in now when rates are sub 5% instead of by the end of the year when they could be much higher than that.
So that is why we haven't seen demand and in turn prices come down.
Although economists do expect the rise in rates to have kind of a tempering effect on demand and prices in the long term.
Back then, credit lending, mortgage lending specifically, was a lot looser.
There were way fewer requirements.
Sometimes you'd get a mortgage without having proper income verification.
Credit score minimums were not as high as they are now.
There have been a good number of regulations put in place by regulators and Congress now to make it much harder to get a mortgage and much safer for people.
borrowers, lenders, and the whole financial system to get a mortgage.
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