Americans don’t believe middle class can afford homes


Two-thirds of Americans believe that current housing prices are making the dream of home ownership beyond the reach of the middle class, a new poll for Newsweek showed, a signal that what experts say is a key builder of wealth is too expensive to afford.

Asked if the median sales price of nearly $388,000, per the National Realtors Association’s (NAR), was affordable for a middle-class family, 66 percent said “no.”

The survey, which was carried out by Redfield & Wilton Strategies for Newsweek on January 18 among 1,500 eligible voters in the U.S., also showed some Americans thought the median cost of a house was lower than what the market was offering, suggesting a gap between expectations and reality when it comes to the housing market in the U.S.

Elevated mortgage rates, expensive homes and lack of enough supply have made buying property in the U.S elusive for millions of Americans. For middle-class Americans, where owning a house can be a builder of wealth and a platform for financial well-being, the dream of acquiring a home has appeared out of reach.

A view of Manhattan from the Edge at Hudson Yards, a new neighborhood with many luxury residences and office spaces, on April 20, 2023, in New York City. A new poll for Newsweek showed that…
A view of Manhattan from the Edge at Hudson Yards, a new neighborhood with many luxury residences and office spaces, on April 20, 2023, in New York City. A new poll for Newsweek showed that Americans believe house prices are too expensive for the middle class.
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Interest rates on home loans soared to two-decade highs of 8 percent in October, though they have dropped to below 7 percent in recent weeks. But prices have remained elevated.

On Friday, the NAR pointed out that the median asking price for an existing home in December was $382,600, an increase of 4.4 percent from the same time a year ago. Existing home sales fell to their lowest level in nearly three decades on an annual basis as prices increased for the sixth month in a row on a year-over-year basis.

Part of the reason prices are high is the limited supply of homes available for sale. Sellers of homes have been reluctant to put their houses in the market as they would rather retain their properties at the low rates they secured than sell and enter a mortgage market characterized by expensive home loans.

Experts have told Newsweek that the U.S. is 4 million homes short of what the market demands, suggesting that competition for the small amount of properties for sale will keep prices elevated for a while longer.

If prices continue to stay high, it could create a gap in the American way of building wealth, housing economists warn.

“Obviously, the recent, rapid three-year rise in home prices is unsustainable,” Lawrence Yun, NAR’s chief economist, said last week in a statement. “If price increases continue at the current pace, the country could accelerate into haves and have-nots.

“Creating a path towards homeownership for today’s renters is essential. It requires economic and income growth and, most importantly, a steady buildup of home construction.”

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.



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