Rates on the Rise in Relation to Affordability

Despite rising rates, ongoing investment demand has continued to counteract them. As of recent, China was the largest inbound real estate investor since 2007. What does this mean? They accounted for a about a quarter of the total cross-border investments. Arguably, they have helped maintain our real estate market. Consequently, new home purchases continue to be affordable. 

Rising Rates
Rates on the Rise

In fact, housing affordability is at it’s lowest point since 2008. Appreciation, rising rates, shortages of build able lots, and excessive regulations are the cause of this according to Wells Fargo Housing Opportunity Index (HOI).With mortgage rates rising, incomes are as well, maintaining affordability. Ironically, these factors haven’t negatively affected the market. Strangely enough, it is quite the contrary. Meanwhile home pricing has remained somewhat steady.

National median home price increased from $247,000 to $250,000. No doubt and increase, however small. Mortgage rates also increased from 3.76% to 3.84%. Another small increase. Presently,  the top five affordable housing markets in order are: Buffalo-Cheektowaga-Niagra Falls, N.Y.; Harrisburg-Carlisle, Pa.; Cincinatti, Ohio-Ky.-Ind. (tied with Harrisburg); and Syracuse, N.Y.

For the 17th consecutive quarter, San Francisco has topped the charts again as the nation’s least affordable major housing market. This comes as no surprise, as the city itself has not been considered affordable in quite some time, if ever. Regrettably, only 7.8% of homes sold in quarter 4 were affordable to families earning median incomes of $104,700 for the area. Incidentally, affordability in California is at an all time low.

All in all, looks like it’s a great time to move to New Mexico! Finally, if you have any questions or comments, please leave them below. Feel free to send me an email, and I will respond as quickly as possible. For more pressing concerns, please don’t hesitate to give me a call!

Bernadette A. Matthiensen

Bernadetteam7@gmail.com (505)804-1372


Original Article-Housing Affordability in U.S. Hits Eight-Year Low

3 thoughts on “Rates on the Rise in Relation to Affordability

  1. Three in particular should be causes for concern. The first is the impact of rate rises on the dollar. Non-US borrowers have been enthusiastic borrowers of dollar debt. This matters because banks are often valued by shareholders in relation to their book value.

    1. Those are all valid points! A very educated assessment. Thank you for your input! If you have any suggestions as to other topics you would like to see, or expand on I would love to hear from you. Thank you again!

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