Most American homeowners said in a recent survey released by the Cato Institute that they would be unable to afford the home they currently own.
According to the survey, 55% say they wouldn’t be able to purchase their home in today’s market, compared to 32% who said they could afford it. The survey found that just one in four Americans believe now is a good time to buy a home.
The survey comes as housing prices surged during the pandemic, which was followed by a spike in mortgage rates.
In the last two years, the 30-year fixed mortgage rate has more than doubled, going from under 3% in late 2020 to now 6.4%, according to federal data. This year marked the first time in 14 years that mortgage rates topped 6%.
Meanwhile, the median price for a home has gone up considerably in the last couple of years. In the first quarter of 2020, the median home went for $329,000. In the third quarter of 2022, it was $454,900.
Although Americans have seen relatively high pay increases in the last few years, according to federal data, those wages have not come close to keeping up with the cost of housing.
The average hourly wage in January 2020 was $28.43. In November, it was up to $32.64.