American house prices still rising
One of the most pressing economic conundrums of the day: why American growth has remained robust, defying predictions of a recession.
Mortgage rates soared, ascending from less than 3% to more than 7%.
For the median family buying the median home, mortgage payments doubled from roughly 14% of monthly household income in 2020 to nearly 29% in June, the highest since 1985
Surprisingly, the jump in mortgage rates has not led to a decline in house prices.
“There are still buyers out there. They have very few options,”
Although demand for homes has fallen as rates have risen, the supply of properties has fallen almost in lockstep. Homebuyers typically obtain fixed-rate mortgages for 30 years—unheard of in most countries but viewed almost as a constitutional right in America
One advantage of newly built homes is that they are actually available.
The Economist 30 August 2023
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