Most Americans couldn’t afford to buy their own home today: Survey

Most Americans couldn’t afford to purchase their own home in today’s market as the United States is facing a deepening economic crisis, according to a survey.

Fifty-five percent of American homeowners say they could not raise the funds to buy their home at current prices and interest rates, according to findings from the 2022 Housing Affordability Survey by Cato Institute released this month, The Hill reported on Thursday.

Sharply higher mortgage rates, surging inflation, and prices that remain near all-time highs are making homes less affordable. 

Housing prices in the United States have spiked more than 40 percent since the start of the COVID-19 pandemic in early 2020.

“I think that the psychology is different now, even compared with January of this year,” said Daryl Fairweather, chief economist at real estate brokerage Redfin.

The survey found that 87 percent of Americans are worried about rising home prices. About 33 percent believe average people would not be able to afford a home in their community. Many Americans fear their own children and grandchildren will not be able to buy a home.   

Their fears are justified as per a recent report by the National Association of Home Builders which found that three-quarters of Arizona residents would not be able to purchase an average Arizona home at current prices.

Other surveys suggest most renters are priced out of the home-buying market in their own cities.  

Interest rates on a standard 30-year mortgage surpassed 7 percent this year, the largest single-year increase in at least 50 years. 

Higher prices and rates have already sent the housing market tumbling into recession. Economists expect the US economy will follow the housing market sink into recession.

House sales are plummeting. The National Association of Realtors recently forecast a 15 percent drop in 2022 and a 7 percent dip in 2023. 

An Iranian-American economist has warned that the United States is at the cusp of a “long and severe” recession, which he says could bring financial distress "across the board."

Ex-treasury secretary Mnuchin says US in recession, will continue

Former U.S. treasury secretary Steve Mnuchin said on Wednesday he believed the United States was in a recession.

Nouriel Roubini, who accurately predicted the housing bubble burst in 2008, was quoted as saying by Bloomberg that the country is in a "sharp slowdown".

Roubini said, "The recession is going to be long, protracted, severe, and associated with financial distress across the board."

Meanwhile, former US treasury secretary Steve Mnuchin said in October he believed the United States was in a recession and said this would continue.

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