First-time home buyers are the biggest losers when it comes to rising inflation
Getty Images/Joe Raedle
- Monthly costs of an "entry-level home" on a nationwide basis surged 9% in March from a year ago.
- Rising housing costs siphon off the new owner’s income, which then can't be used for other things.
- Potential buyers are looking for housing further away and incurring commute costs.
Home prices have been surging in many markets, mortgage rates have been rising, and incomes have plodded along with little growth, and the disconnect is getting bigger and bigger. This is not a problem for well-to-do Americans who’ve owned a lot of assets and benefited from the rampant asset price inflation over the past eight years, but it is a problem for those trying to buy a home based on their wages, especially first-time buyers, which now include more and more millennials.
Freddie Mac reported on Thursday that its weekly average 30-year fixed mortgage rate rose to 4.47%, the highest since January 2014, which is still very low historically. On Friday, the average 30-year fixed mortgage rate for top tier borrowers rose to 4.58%, according to Mortgage News Daily, on a day when the Treasury 10-year yield surged to 2.96%, the highest since 2014.See the rest of the story at Business Insider
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