Understanding the Impact of Interest Rates on Homeownership
Posted On: January 9, 2024
In a new whitepaper, Navigate CEO Lisa McCarroll delves into the critical issue of homeownership affordability amidst climbing interest rates. The paper highlights the stark contrast between the steady rise in home prices and the sluggish wage growth. With a detailed analysis of interest rates peaking at 7.8% in 2023 and a slight decrease to 7.04% in 2024, McCarroll sheds light on how these rates directly lead to higher mortgage payments, pushing the dream of owning a home further away for many. The paper outlines the challenges and discusses actionable solutions, emphasizing Navigate’s commitment to making homes attainable. This whitepaper is a must-read for anyone interested in today’s housing market dynamics.
Here’s an excerpt:
“According to the U.S. Bureau of Labor Statistics (BLS), between November 2022 and November 2023, “real average” hourly earnings increased by 0.8% while the average workweek decreased by 0.3%. Workers, as a result, only saw a meager increase in weekly earnings. This reality has made homeownership less affordable.
The sharp rise in interest rates fuels the affordability crisis, reaching unseen levels in over two decades. The 30-year mortgage rate peaked at 7.8% in October 2023. By January 2024, mortgage rates dropped to 7.04%. Despite the decrease, mortgage rates are significantly higher than two years ago. These elevated rates significantly directly into higher monthly payments for new homeowners.
Increased interest rates and slow wage growth have widened the gap between the cost of housing and what the average working person deems affordable. As Navigate Affordable Housing Partners seeks to bridge this growing affordability gap, it becomes clear that innovative solutions are needed.”
Lisa McCarroll is the CEO of Navigate Affordable Housing Partners. She is an expert in affordable housing and community revitalization. Lisa’s pragmatic approach has expanded access to quality, sustainable homes.