Housing affordability drops, as market recovery takes hold

TRD New York /
Dec.December 11, 2012 01:30 PM

While rising home prices are a boon to the greater economy, they are also starting to squeeze the record affordability that was drawing so many home buyers back into the market, CNBC reported. The National Association of Realtors’ Affordability Index shows that housing affordability is now dropping, as asking prices have begun to rise faster than rents, a trend that could hurt the fledgling housing recovery.

“The price recovery is strongest in the largest metros, and price gains have now surpassed rent gains in the largest 25 rental markets. However, price gains are starting to waver in smaller markets,” Trulia’s Jed Kolko, said.

Moreover, so-called “guarantee fees” charged by by Fannie Mae and Freddie Mac for bundling and selling mortgages has also hurt the affordability of mortgages, despite historically low interest rates.

“G-fees will continue to increase as a way to run down the GSEs’ [government-sponsored enterprises] role in the mortgage market,” Paul Diggle of Capital Economics wrote in a statement. “Stronger mortgage demand suggests that would-be buyers are growing in confidence. Nevertheless, mortgage lending will continue to be held back by tight credit.” [CNBC]Christopher Cameron


Related Articles

arrow_forward_ios
Duke Long and Poshtel International CEO Morten Lund

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

US home sales slide again in June as prices hit all-time high

US home sales slide again in June as prices hit all-time high

(Credit: iStock)

US existing home sales bounce back in May as spring buying season heats up: report

Propy CEO Natalia Karayaneva (Credit: iStock)

NAR’s venture capital arm is now a blockchain investor

President Donald Trump addresses the National Association of Realtors on Friday (Credit: Getty Images)

“I feel like home”: Trump touts economy, gushes over agents at NAR conference

NAR CEO Bob Goldberg (left) and Crexi CEO Michael DeGiorgio

NAR inks partnership with Crexi

Is the tax overhaul law impacting real estate?

Is the tax overhaul law impacting real estate?

National Cheat Sheet: Blackstone Group plans to become a corporation, NAR hit with new antitrust suit  … & more

National Cheat Sheet: Blackstone Group plans to become a corporation, NAR hit with new antitrust suit … & more

arrow_forward_ios
Loading...