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good afternoon so we have this situation where um things are not going well um with uh with the housing market it's not a crash not anything like that but um I don't know if you if you've noticed but mortgage rates have gotten a little bit ridiculous and that's causing affordability problems now there's different arguments we could say that there's a supply issue and all the stuff but but let's just let's just focus on the affordability issue today and I saw this article and I wanted to bring it to your attention it's from CBS News it says homes unaffordable in 99% of the nation for the average American well that's not

good that's a problem and uh so we'll just kind of go through the article and you can see um what they're what they're talking about it says the typical American cannot afford to buy a home in a growing number of communities AC cross ination according to Common lending standards well that's kind of a bad thing because you need a mortgage most people will will finance with the mortgage especially if the rates are are cheap but right now um I think we're headed towards eight 8% on a 30-year fixed is not a good place to be for affordability it says that's the main takeaway from a new report from Real Estate data provider Adam researchers examined the median homes prices for last year for roughly 575 us counties and found that home prices in 99% of those are beyond the reach of the average American Income earner I added American who make $1,214 a year so this this gels perfectly with what I see in my in my business I have young couples work working very very hard to buy their first house or maybe even to try to move up from their starter home and they are completely locked out of this Market they're good good people great credit trying to be fiscally respons responsible and they just cannot afford a decent home I mean there are homes out there but I mean they're usually fixers fixer uppers which are not not work again professionals really want to be it says housing experts point to a couple of Trends driving up housing costs mortgage rates of top 7% added hundreds of dollars per month to potential house payment at the same time homeowners who are locked in at lower mortgage rates during the pandemic have opted not to sell out of fear of having to buy another property at today's elevated rates depleting the supply of homes for sale now the last couple episodes we've talked about um Supply I don't think that's going away anytime soon the lack of Supply unless unless those short-term rental owners those people that are the mom and pop investors Wall Street instead instead if if they decide to sell if the pain is too much if occupancy is too low then perhaps we will see some Supply come to the market but if we're really in a spot here fed's continuing to to raise rates or continuing to hold rates there's no cheap money and uh that's that's not going to help rates um uh for the longest time you know I was uncomfortable with the idea that we're we had rates too low I I I mean 3% 3 and a half% 4% it was just overstimulating the housing market like to a degree that wasn't okay um at the time it was argued that there was supply chain disruptions and that that's why houses weren't being built and that's why things were so expensive I I never really felt that was the case I I thought that we were we were uh making it so that everyone could afford a very nice home nothing wrong with that except for the fact that if if if it's detached from like if the money's too cheap you get into this situation says prices will remain unaffordable as long as mortgage rates continue to rise Fairweather said that's Daryl Fairweather he's a redin economist um yeah yeah prices will remain unaffordable as long as mortgage rates continue to rise and even if they stay the same it's pretty much unaffordable for for the vast majority of of people says Adams data adds to a growing body of Real Estate research in recent years that highlights the lack of affordable housing and i' I've argued for a long point in time that look what you think of as affordable housing is not what people talk about when they say they're going to build affordable housing those affordable housings are set asides those are things that that that have nothing to do with the average person being able to afford a home if you build 50 houses in a neighborhood you aren't fixing the problem with Supply and you're also not fixing the problem with affordability I mean it's it's more it's more Troublesome than that first-time home buyers who are often the most sensitive to interest rates have had to postpone their home buying dreams well it it does it's this this level of mortgage is affecting everyone I have young professionals that could easily afford a second you know a new a move up home that that can't in this environment with 8% they were down at around six they gave up so I mean it's bad it says the older buyers with more cash on hand can buy down interest rates or they can absorb a higher monthly payment and are still buying homes across the country well that may have been the case when this came out but that's not the case right now at least not in St Louis things are starting to grind to a halt and as we see the rates continually move up it's getting worse and worse now it is good in this article we have a definition of uh unaffordable it says Adam defined unaffordable as someone who must devote more than 28% of their income toward paying for a particular home factoring in a mortgage payment homeowners insurance and property taxes the typical home price today would require 35% of someone's annual wages and so you can see like that's a problem and I think it's I think it's even higher there was a teacher that wanted to buy a house and and this woman was looking for a house for $100,000 and in St Louis right now you're not going to find anything you know for a family for $100,000 and she she told me she said this is so ridiculous I go to work every day and I can't afford a home I don't understand and you know that's that's what we're seeing in the market right now and it is terrible so I uh I saw that article I thought it was kind of interesting um what are you seeing I mean are you one of those people that are like well it's too bad that you can't afford the house house that's the way it's going to be welcome to capitalism or are you like you know hey the government's going to fix this somehow even though the government might have caused this problem in the first place I'd be interested to know your thoughts put them in the comment section

um I mean I just I I think this is terrible I find this to be absolutely awful and uh and would like to see things work themselves out I just don't think it's with all the things going on right now I just don't see it happening anytime soon I hate to be a downer but uh but that's what I see with that I'm going to head on out thank you for watching thank you for listening and I'll catch you on the next one