Steven Russolillo reported in Tuesday’s Wall Street Journal that, “By some measures in the U.S., there has never been a better time to own a home. Wages are rising, unemployment is falling and interest rates are hovering near record lows.”
The Journal article noted that, “And yet, all of that is little solace to adults who haven’t yet stepped on the housing ladder’s first rung. Their caution has helped drag the homeownership rate to a record low.
“A new study by national realtor Redfin found affordability was the biggest concern among all U.S. home buyers. The results were even more striking among Americans 35 and younger. One-third of surveyed millennials said the fact that ‘prices are rising or are too high’ was their biggest concern. That was more than double the next biggest worry—competition.”
Mr. Russolillo also pointed out that, “Federal Reserve Chairwoman Janet Yellen sent a strong signal last week that the central bank will raise short-term interest rates again, perhaps even next month.
“In the affordability equation, an uptick in rates can’t be ignored. If 30-year mortgage rates rise by 1 percentage point a year from now and home prices hold steady, a monthly mortgage payment could jump by about 13%.
“Expect the ranks of homeowners to keep dwindling.”
