The American Dream of Homeownership is Becoming More Cost-prohibitive

According to Point2, which covers real estate market trends and news, the American dream of homeownership is becoming more cost-prohibitive than ever, particularly in the country’s largest and most in demand cities. Mortgage rates continue to hit new record levels; however, those lower levels are being offset by rapidly increasing home costs. The magic number for affordability is 30%—a mortgage over 30% of a household’s income deems that home unaffordable. Fifteen major cities have now crossed that threshold, up from only 13 cities in 2010. Point2, is also reporting that incomes are not keeping up with the rising cost of mortgages, with 53 of the 100 largest cities have home prices increasing faster than wages. In addition to stagnant wages, the study’s authors point to restrictive building codes and underinvestment in construction as primary reasons for the housing cost crisis.