U.S. Housing Affordability Becoming Illusive In The Traditional Sense (Site-Built Homes)
It’s more difficult than ever to afford housing in the U.S. There is a smart alternative.
Today, homeownership is frequently cited as an example of attaining the American Dream. It is a symbol of financial success and independence, and it means an ability to control one’s own dwelling place instead of the whims of a landlord.
For many, the realization of that unique element of the American Dream is becoming illusive in the traditional sense (site-built homes), as the affordability gap widens between hardworking low-to-middle income families and those in the upper range of wage earners.
Manufactured Housing Bridges Affordability Gap
There is a form of housing that bridges that affordability gap and is “everything a home should be” – today’s manufactured home- which is generally equal and often superior, in every respect, to a traditional site-built home and will have a cost up to 50% less than a comparably-sized custom home constructed on site.
It is conceivable that within the not-so-distant future a majority of America’s new housing stock will be built in a factory. That being said, consider the following financial advantages of manufactured housing over traditional site-built homes, keeping in mind that a new manufactured home is custom built with all the features, materials, energy efficiency and appearance as a site-built home.
When permanently sited on private property a manufactured home may be financed with the same parameters and lenders as a site-built home. That translates to a monthly payment of about half the mortgage payment of the site-built home.
Report: Median Home Mortgage Payment Up 19%
Global markets publication, the Kobeissi Letter, declared last week that housing affordability in America is now at an all-time low, pointing to several striking data points showing it is more expensive to pay for a place to live in the U.S. than ever.
For starters, the outlet said buying a house in the U.S. has become a luxury. It pointed to a Redfin report released Friday showing the median home mortgage payment in the U.S. hit $2,605 a month in July, up 19% from a year ago and the most expensive ever.
Kobeissi reported there are now a record 31 states where homeowners pay a median monthly house payment above $2,000 per month, and Hawaii is now the first state in history with a median house payment above $5,000. Not far behind are Californians whose media mortgage bill is at $4,800, followed by Massachusetts homeowners who pay $4,000.
Thirty-seven states now require at least 30% of median annual income for new home payments in what the letter said “truly is an unprecedented market.” In California, the median house payment requires a record 64% of median household income.
Kobeissi says typically.in a market where interest rates rise as fast as they have under the Federal Reserve’s ongoing rate-hike campaign that currently has the average for a 30-year mortgage around 7.1%, housing prices would be expected to pull back.
Source: FOX Business
