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New York Post
2 days ago
- Business
- New York Post
Home affordability is ‘historically low' — with owners spending a whopping share of their income on the mortgage: Report
Trying to afford a home in 2024? Say goodbye to your disposable income. First-time homebuyers are in trouble, according to a new report on the affordability gap by researchers at the JPMorganChase Institute. The findings, reported by reveal that today's typical homebuyer spends 45% more of their income on mortgage payments than they did in 2019. Specifically, affordability is 'historically low.' The report connected post-pandemic price hikes and interest rate increases to 'a rapid deterioration in housing affordability,' particularly for first-time homebuyers, who typically fall between the ages of 25 and 44. Advertisement 3 Almost half of American homeowners' disposable income is going towards their mortgages. Getty Images 3 Rapid increases in home prices and high rates have put pressure on American wallets, despite hefty wage increases. Getty Images/iStockphoto The report's snapshot of the five-year period between 2019 and 2024 paints a dismal picture for hopeful homebuyers. During that time, home prices surged by 50%, according to the Federal Reserve Bank of St. Louis. Advertisement Higher prices combined with rate hikes resulted in mortgage costs nearly doubling. The typical monthly mortgage payment increased by roughly $600 since 2019, researchers found, and not even substantial increases to American wages have helped to keep up the pace. The bleak outlook may be contributing to buyer skittishness. For-sale housing stock is piling up this year, and the median age of first-time buyers recently reached a record high. 3 The affordability gap widened the most in less densely populated areas. Getty Images Advertisement American 24- to 44-year-olds spent 58% of their monthly incomes on their mortgages on average in 2024, according to JPMorganChase. That lump sum is in stark contrast to the 30% spent by the same age group in 2019. The impacts of the widening affordability gap reverberated far beyond ritzy metros. Hopes of affording a home narrowed the most in suburbs, smaller metros and rural areas, according to the report. Increased post-pandemic demand put pressure on these smaller locales, as remote work allowed buyers to seek out affordability in less dense communities. Residents of these small towns and idyllic suburbs missed out on the higher income gains enjoyed in densely populated metros, the report noted.
Newsweek
2 days ago
- Business
- Newsweek
Americans See Suburban Dream Homes Sliding out of Reach
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Owning a beautiful home in the suburbs with white picket fences was once a cornerstone of the American dream; but in this economy, many U.S. residents are opting for renting such properties instead. With the median list price of a typical U.S. home at $440,000 last month, according to data, and the national average 30-year fixed mortgage rate at 6.8 percent, many buyers have been pushed to the sidelines of the market, delaying any purchase to a later, better time. Renting, on the other hand, is much more affordable. A recent study by Bankrate found that, nationally, an average mortgage payment costs 38 percent more per month compared to the average rent. Big cities like San Francisco; San Jose, California; and Seattle have the largest gaps between renting and buying affordability. American suburban houses in Racine, Wisconsin, in 2014. American suburban houses in Racine, Wisconsin, in 2014. Getty Images The market is taking notice of this significant shift in the U.S. housing market, where a growing number of Americans are looking to rent instead of buy. According to a recent report by analyzing data from the American Community Survey, the supply of rental properties in suburbs surrounding major metropolitan areas has surged in recent years, both because of new construction and because many homes once occupied by the owners are now being rented out. Why Is Renting Surging in the Suburbs? senior economist Jake Krimmel found that suburban rentals increased between 2018 and 2023 in metros that saw a boom in new constructions—such as Austin, Texas; Nashville, Tennessee, and Denver—as well as in those with low construction rates—such as Boston, Philadelphia, and Washington, D.C. "In general, the suburbs have boomed during and after the pandemic, due in large part to people wanting more space and also because the large generation of millennials were beginning to settle down and start families," Krimmel said in the report. "With all this demand for the suburbs, we saw a lot of new construction activity there." Suburban areas close to red-hot markets which exploded during the pandemic saw the biggest increases in renter-occupied homes, however. Bastrop County in Texas, some 30 miles from downtown Austin, reported a surge by nearly 50 percent between 2018 and 2023. Williamson County, near Nashville, saw a 25-percent increase in the number of rentals in five years. Suburbs near major metros still suffering from more acute inventory shortages and with lower pace of constructions still reported significant increases. Prince George's County and Howard County, near Washington, D.C., saw the number of rentals go up by 11 percent and 12 percent, respectively, between 2018 and 2023. "In short, demand for suburban living is up, and supply in many markets has met that demand," said Krimmel. "But even in metros that didn't build a lot in response to this demand, we still see a rise in suburban rentership." Built-to-rent construction has also increased over the past few years, with roughly 100,000 new build-to-rent properties being developed across the U.S. at this time. The top five metros with the highest number of build-to-rent units are Phoenix (17,000 units), Dallas (15,000 units), Houston (9,000 units), Atlanta (8,000 units) and Charlotte, North Carolina (4,000 units.) Is Renting Really That Much More Affordable? Not only renting a property is much more affordable than buying one—it is also becoming increasingly cheaper over time. May marked the 22nd consecutive month of year-over-year decreases, according to with the median rent nationwide at $1,705 per month in the 50 largest metros in the country, down 1.7 percent year-over-year. President Donald Trump's policies targeting international students are also likely to bring down rents in cities hosting prestigious institutions such as Harvard, experts say. "A decline in international student enrollment could weaken the global and even domestic talent pipeline feeding into high-growth industries and potentially soften rental demand in these markets," economist Jiayi Xu said in a report. But experts warn that in the long run, homeownership might still be a better investment than renting. "The thing you have to consider is that rent could definitely go up in the long run, whereas mortgage rates will probably fall in the long run," Daryl Fairweather, chief economist at Redfin, told Bankrate. "Eventually, you'll pay it off and own it outright."
New York Post
3 days ago
- Business
- New York Post
Rhode Island's ‘Taylor Swift Tax' stands to hit her and her wealthy neighbors with six-figure bills
Rhode Island is weighing a proposal that could hit pop superstar Taylor Swift — and dozens of her wealthy neighbors — with a six-figure tax bill for leaving their coastal mansions mostly unoccupied. The so-called 'Taylor Swift Tax,' an unofficial moniker for a proposed surcharge on luxury properties not used as a primary residence, would levy significant annual fees on second homes valued over $1 million. Swift's sprawling estate in Watch Hill, assessed at roughly $17 million, could be subject to an additional $136,000 in taxes each year if the measure is approved, according to Advertisement 7 Rhode Island lawmakers are pushing a new tax targeting luxury second homes — nicknamed the 'Taylor Swift Tax' after the pop star whose $17 million Watch Hill mansion would be among the hardest hit. © Ryan Turgeon/ /Splash News/Corbis 7 The proposal would impose a surcharge on non-primary residences valued over $1 million, charging $2.50 for every $500 above that threshold. demerzel21 – While the legislation does not single out Swift by name, her high-profile ownership has thrust her into the spotlight of a broader debate playing out across New England's elite seaside enclaves. Advertisement The initiative, formally referred to in budget documents as a 'non-owner-occupied property tax,' is part of a growing effort by lawmakers to address housing affordability in the Ocean State by tapping into the wealth of seasonal residents. At the heart of the proposal is a straightforward formula: properties valued at more than $1 million that are not used as a primary residence would face a surcharge of $2.50 per $500 of assessed value beyond the first million. 7 Taylor Swift seen at her Rhode Island home. Taylor Swift/Instagram That adds up quickly for high-end homes in coastal towns like Westerly and Newport, where property values have surged in recent years, partly due to out-of-state buyers and short-term rental demand. Advertisement Lawmakers backing the measure argue that absentee ownership contributes to housing shortages and erodes community life. Many luxury homes sit vacant for much of the year, they say, while local workers and families struggle to find affordable housing. Supporters believe the tax could help balance that equation. By imposing a cost on keeping homes empty, they hope to encourage property owners either to spend more time in their homes or open them to renters — both of which would inject life, and potentially revenue, into quiet off-season communities. The revenue generated would be earmarked for housing initiatives. 7 For Swift, that could mean an extra $136,000 a year. Richard Beetham / Advertisement 7 Supporters say the tax would help fund affordable housing and encourage year-round occupancy in coastal towns dominated by seasonal owners. demerzel21 – Opponents, however, warn of unintended consequences. Real estate agents and longtime property owners caution that the measure could deter investment, depress home values and even pressure multigenerational families to sell beloved beach homes they've owned for decades. They argue the policy casts too wide a net, penalizing not only speculative investors but also those with deep roots in the state. 7 Critics, including real estate professionals and longtime homeowners, argue it could chill the high-end market and harm local economies. jonbilous – 7 The proposal reflects growing tensions between full-time residents and wealthy part-time homeowners, with a July 2026 deadline for affected owners to either pay up, move in or rent out. Noah Hairston/Wirestock Creators – Debate over the bill has drawn sharp lines between lawmakers and real estate professionals, full-time residents and part-time neighbors. While some view the measure as a needed corrective to a distorted housing market, others see it as a shortsighted move that could undermine property rights and local economies. If passed, the law would not take effect immediately. Homeowners would have until July 2026 to adjust — either by proving they spend at least 183 days a year at the property (the standard for primary residence status) or by listing their homes as rentals.
Yahoo
3 days ago
- Business
- Yahoo
No Canada! North-of-the-border buyers pull back as trade war heats up
Belligerent rhetoric from the White House about being annexed to the United States and combative trade negotiations are denting Canadian interest in owning American property, just as the housing market south of the shared border is starting to cool. Canadians made up the biggest share of foreign buyers of U.S. residential real estate in 2024, according to the National Association of Realtors, with 13% of the foreign purchase market – followed by China and Mexico at 11% each. In five years out of the last decade, Canadians have led foreign purchases. Miles Zimbaluk came to the Phoenix area from Saskatchewan in the wake of the 2008 subprime crisis, and 'fell in love' with Arizona, he said. A favorable exchange rate and low-priced properties helped convince him to stay, and he founded Canada to USA and Cross Border Insurance, real estate services firms that help north-of-the-border buyers and renters. 'I never expected to see anything like this,' Zimbaluk said in an interview. 'People have absolutely been turned off by the talk of annexation.' The rhetoric has pushed some people to sell the second homes they have owned in Arizona, and others are deciding to hold off rather than buy, he said. In the first quarter of 2025, Canadians have listed more than 700 homes for sale in Maricopa County, compared to 100 homes in the same period last year, Zimbaluk said. Canadians own about 30,000 properties in the county, however. Data from confirms that Canadian interest is waning. Canadians still made up the largest share of online home viewers in the first quarter, at 34.7%, but that's down sharply from 2024, when they represented 40.7% of house-hunters. For now, the slowdown isn't a huge concern, said Jiayi Xu, a economist, but is definitely something to keep an eye on. For the most part, Canadians buy in warmer metros with lower taxes – like Arizona and Florida – and as second-home buyers, are more interested in higher-priced properties, so those are the market segments she's watching most closely. Still, any slowdown in demand isn't helpful for the weakening U.S. housing market. In April, sales of previously-owned homes were at the slowest pace for any April since 2009, according to the National Association of Realtors. The pace of sales set that month was below the 4.06 million mark achieved in 2024, which was the worst year since 1995. In South Florida, real estate agents are 'absolutely' seeing less demand from Canadians, said Jeff Lichtenstein, the owner and broker of Echo Fine Properties, headquartered in the greater Palm Beach area. 'Some of it is uncertainty, some of it is not feeling as welcome,' Lichtenstein told USA TDOAY. 'As a country, we're making a lot of news. We're in the news a lot. None of that is good for tourism or buying real estate." To be sure, many Canadians are motivated by factors other than politics. Home prices have risen dramatically, particularly in the sunnier metro areas favored by snowbirds, making now a good time to cash out on a purchase made some time ago. It also makes buying an iffier proposition, particularly when coupled with an unfavorable exchange rate. The "loonie" has weakened compared to the U.S dollar in recent months, making it more expensive for Canadians to buy American goods. 'We think Canada's economy has slipped into a trade war-induced recession that will last through the end of 2025 unless a deal is reached to immediately reduce U.S. tariffs,' analysts at Oxford Economics wrote in a June 13 report. 'Job losses and higher prices due to the pass-through of tariffs and worsening supply chain strains will weigh on disposable income and consumer confidence. This will cause households to rein in spending and likely extend the recent weakness in the resale housing market.' Read next The US is short millions of housing units. Mass deportations could make it worse. What's more, the longstanding sense of America as a welcoming haven with friendly people has been damaged, real estate agents say. Lichtenstein notes that the White House's stance on South- and Central American immigrants is likely to be felt in the Miami area, making it a one-two punch for Florida real estate. 'A lot of people are saying they don't feel comfortable being in the U.S.,' Zimbaluk said. While no-one is concerned for their safety, per se, he has heard of some people with Canadian license plates having nasty notes left on their windshields. 'There's just so much uncertainty. Everyone is trying to find their own way.' This article originally appeared on USA TODAY: No Canada! Why fewer snowbirds are buying U.S. homes
USA Today
3 days ago
- Business
- USA Today
No Canada! North-of-the-border buyers pull back as trade war heats up
No Canada! North-of-the-border buyers pull back as trade war heats up Show Caption Hide Caption King Charles praises Canada as 'strong and free' amid Trump feud King Charles visited Canada amidst calls from President Donald Trump that the U.S. should annex Canada. Belligerent rhetoric from the White House about being annexed to the United States and combative trade negotiations are denting Canadian interest in owning American property, just as the housing market south of the shared border is starting to cool. Canadians made up the biggest share of foreign buyers of U.S. residential real estate in 2024, according to the National Association of Realtors, with 13% of the foreign purchase market – followed by China and Mexico at 11% each. In five years out of the last decade, Canadians have led foreign purchases. Miles Zimbaluk came to the Phoenix area from Saskatchewan in the wake of the 2008 subprime crisis, and 'fell in love' with Arizona, he said. A favorable exchange rate and low-priced properties helped convince him to stay, and he founded Canada to USA and Cross Border Insurance, real estate services firms that help north-of-the-border buyers and renters. 'I never expected to see anything like this,' Zimbaluk said in an interview. 'People have absolutely been turned off by the talk of annexation.' The rhetoric has pushed some people to sell the second homes they have owned in Arizona, and others are deciding to hold off rather than buy, he said. In the first quarter of 2025, Canadians have listed more than 700 homes for sale in Maricopa County, compared to 100 homes in the same period last year, Zimbaluk said. Canadians own about 30,000 properties in the county, however. Data from confirms that Canadian interest is waning. Canadians still made up the largest share of online home viewers in the first quarter, at 34.7%, but that's down sharply from 2024, when they represented 40.7% of house-hunters. For now, the slowdown isn't a huge concern, said Jiayi Xu, a economist, but is definitely something to keep an eye on. For the most part, Canadians buy in warmer metros with lower taxes – like Arizona and Florida – and as second-home buyers, are more interested in higher-priced properties, so those are the market segments she's watching most closely. The U.S. housing market is slowing down Still, any slowdown in demand isn't helpful for the weakening U.S. housing market. In April, sales of previously-owned homes were at the slowest pace for any April since 2009, according to the National Association of Realtors. The pace of sales set that month was below the 4.06 million mark achieved in 2024, which was the worst year since 1995. In South Florida, real estate agents are 'absolutely' seeing less demand from Canadians, said Jeff Lichtenstein, the owner and broker of Echo Fine Properties, headquartered in the greater Palm Beach area. 'Some of it is uncertainty, some of it is not feeling as welcome,' Lichtenstein told USA TDOAY. 'As a country, we're making a lot of news. We're in the news a lot. None of that is good for tourism or buying real estate." Canadian economy suffering because of tariffs To be sure, many Canadians are motivated by factors other than politics. Home prices have risen dramatically, particularly in the sunnier metro areas favored by snowbirds, making now a good time to cash out on a purchase made some time ago. It also makes buying an iffier proposition, particularly when coupled with an unfavorable exchange rate. The "loonie" has weakened compared to the U.S dollar in recent months, making it more expensive for Canadians to buy American goods. 'We think Canada's economy has slipped into a trade war-induced recession that will last through the end of 2025 unless a deal is reached to immediately reduce U.S. tariffs,' analysts at Oxford Economics wrote in a June 13 report. 'Job losses and higher prices due to the pass-through of tariffs and worsening supply chain strains will weigh on disposable income and consumer confidence. This will cause households to rein in spending and likely extend the recent weakness in the resale housing market.' Read next The US is short millions of housing units. Mass deportations could make it worse. What's more, the longstanding sense of America as a welcoming haven with friendly people has been damaged, real estate agents say. Lichtenstein notes that the White House's stance on South- and Central American immigrants is likely to be felt in the Miami area, making it a one-two punch for Florida real estate. 'A lot of people are saying they don't feel comfortable being in the U.S.,' Zimbaluk said. While no-one is concerned for their safety, per se, he has heard of some people with Canadian license plates having nasty notes left on their windshields. 'There's just so much uncertainty. Everyone is trying to find their own way.'
