flexiblefullpage - default
Currently Reading

New S&P Report Warns That 60% Of U.S. Households Could Be Priced Out of Starter Homes


New S&P Report Warns That 60% Of U.S. Households Could Be Priced Out of Starter Homes

A nationwide affordability crisis is leaving low- and middle-income homebuyers with few options, and for some, none at all

July 26, 2022
Woman holding sign reading "housing is a human right"
Image: Stock.adobe.com

A new S&P Global Ratings report forecasts that 60% of U.S. households will be priced out of the market for starter homes by the end of 2025, a daunting outlook even as the market begins to cool and home builders prep for a potential recession. A widening affordability crisis already priced out 40% of households across the U.S., but those with fixed-rate mortgages are less susceptible to climbing rates down the line. Instead, prospective homeowners will feel the sting of higher monthly payments in a market slowly normalizing after two frenzied years for homebuying. 

Americans in the bottom one-fifth income bracket earning up to $27,000 a year would need to spend at least 100% of their income to afford a monthly mortgage payment, while middle-income borrowers are forced to set aside 26.7% of their income, a figure likely to rise further by the end of the year, Realtor.com reports.

S&P’s report pointed to the roughly 20% annual rise in home prices and a more “hawkish” Federal Reserve as key culprits of the housing “affordability crunch,” with the central bank’s inflation-fighting policies pushing 30-year mortgage rates to 5.18% in the second quarter, a 13-year high.

The Fed is expected to raise interest rates by another 75 basis points next week, and continue hiking rates aggressively this fall as it looks to tamp down inflation that hit a 41-year high of 9.1% in June. The yield on the benchmark 10-year Treasury note climbed back above 3% and stocks rallied sharply for the week.

Read more

Related Stories

Housing Markets

Homeownership Dreams Put On Hold by Buyers in Popular Metros

The housing market may be slowing, but buyers in popular metros like Austin, TX are still seeing record high home prices 


Inflation Is Rising the Fastest in Sun Belt Cities—Here’s Why

Homebuyers who flocked to Sun Belt metros sent prices soaring throughout the pandemic, and rapid inflation is only exacerbating an existing affordability crisis

Community Development

These St. Louis Lawyers Created a Replicable Model for Neighborhood Renewal

The SmithNMTC corporation is revitalizing neighborhoods across the U.S. by using a federal tax credits program to finance affordable housing projects

boombox1 -
native1 - default

More in Category

native2 - default
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.