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Americans spend most of income on mortgages since 2009
THE price of being a homeowner in the US touched a nine-year high in the first quarter, with borrowers in some parts of the country spending half their income on mortgages, according to a report released on Thursday by Zillow.
The combination of rising home values and interest rates, and incomes that haven't kept pace, pushed the cost of covering mortgage payments to 17.1 per cent of the median income in the first quarter.
That's up from 15.9 per cent in the previous three months and the highest since the second quarter of 2009.
While wages are beginning to rise, home prices have been surging for years as buyers compete for a shrinking inventory of listings.
The average rate for a 30-year fixed mortgage climbed to 4.44 per cent at the end of March, up from 3.95 per cent at the beginning of the year, data from Freddie Mac showed.
"For the past few years, historically low mortgage rates provided the silver lining for buyers as prices rose higher and higher," Aaron Terrazas, a senior economist for Zillow, said in a statement.
"That affordability edge is getting thinner. In markets that have seen some of the biggest increases in home values, housing costs already take up a larger share of income than they did historically, making it all the more difficult for buyers." BLOOMBERG