Countless families are struggling just to find somewhere affordable to live, with the American dream of homeownership all but snuffed out for much of the middle class.
The predictable result of too much money relative to the size of the economy was inflation, as prices everywhere rose. The housing market has not been spared from this relentless upward march in prices, with both median rents and mortgage payments at all-time highs, the result of a double whammy from high prices and high interest rates.
The combination of higher home prices and higher interest rates has completely broken America’s housing market. Since Mr. Biden became president, the median home price has jumped over 27%, and interest rates have risen from 2.8% to 7.2%. Those two factors have caused the monthly mortgage payment on a median-priced home to more than double, from $979 to $2,075.
For those lucky enough to have gotten a mortgage before interest rates jumped, they’re now wearing golden handcuffs and are trapped in their existing homes and mortgage. If they were to sell their house and move, they’d lose their current mortgage with a low interest rate and must get a new mortgage with double the interest rate.