What do you think of when you picture something considered a ‘luxury item’? Maybe a $250,000 car? Or perhaps, a high-end bottle of Dom Perignon, worth a couple of grand.
What about a house? Not a sprawling 5,000-sf estate, but an average, single-family home. According to CNBC, it might not be too long before this might be considered a luxury item. Almost 50 percent of people who don’t own a home said their financial situation is what was standing in the way of buying. 29 percent said they can’t afford a down payment and 16 percent said their credit isn’t good enough to qualify for a mortgage. 35 percent said they simply do not want to own a home.
While mortgage rates are near the lowest levels ever, home prices are still high and continuing to rise, thanks in large part to the tight supply.
Additionally, first-time homebuyers are spending about 2.6 times their annual pay on their new home; that number was only 1.7 times a homebuyer's annual pay back in the 1970s.