The real estate market currently favors the ultra-rich, who are making record levels of all-cash luxury home purchases. This is occurring in one of the least affordable US housing markets in decades, effectively freezing out aspiring homeowners from younger generations.America’s housing market is a nightmare for most, but the rich are sitting pretty. As aspiring homeowners get shut out, the wealthy are snapping up properties left and right.
“Historically, higher-priced homes are the first to feel the hit when interest rates rise,” Zonda’s chief economist Ali Wolf told the outlet. “We aren’t seeing that today. High home equity and the strong stock market have acted as a buffer against interest rates for wealthier Americans.” The split we’re seeing in the housing market mirrors the wider economic divide, Nationwide senior economist Ben Ayers explained to Bloomberg. While asset values surge, many people are barely scraping by.
Homebuilders know the need for affordable housing is urgent. But with the cost of land, labor and materials all rising, it’s a tough nut to crack. Houston-based David Weekley Homes, one of the largest privately held builders, is struggling to produce homes for under $400,000, says president Chris Weekley.
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