Hidden Data Reveals: Have House Prices Finally Hit Rock Bottom?
Download MP3 Topic: National Review analysis highlights that a six-figure income is now required to afford a median home. The figure needed to service a monthly mortgage payment in 2022 has increased to $107,000, up from $73,000 in 2021.
Key Takeaway: The income required to buy a home has risen by $34,000, marking a 50% increase from the previous year.
Questions for Builders and Contractors:
- How will this income jump affect your business?
- Will you be building spec homes, launching major developments, or focusing on remodeling and additions?
- With more people unable to afford new homes, will remodeling and additions become the primary market for builders?
- What impact will this have on the availability of new homes and home inventories in the future (2025-2027)?
Current Situation in the Housing Market:
- There is already a 3-4 million home shortage in the market. If new construction slows down further, this gap could increase.
- The lack of new homes could also contribute to higher home prices as demand grows.
Historical Perspective on Home Construction:
- Until the 1980s, homes were built to last forever using robust materials.
- Since the 1990s, the focus shifted to homes designed to last for around 40 years, which means some homes built in the 1990s and 2000s could be reaching the end of their lifespan.
Concerns about Existing Homes:
- Are we already seeing homes from the 1990s or 2000s that are beyond repair due to water intrusion, structural issues, or air infiltration?
- As these homes go out of circulation, the housing market could face even more inventory shortages.
Looking to the Future (2030):
- If there is no significant new construction and older homes become unsalvageable, will there still be a shortage of homes in 2030?
- What effect will this have on home prices?
We Want to Hear From You:
- Builders, contractors, and anyone involved in the housing industry: Share your thoughts on how these trends will impact your business and the housing market moving forward.
