Just when you thought buying a house couldn’t get any more unaffordable, it did.

As of August, homebuyers needed a household income of $115,000 — about $40,000 more than the average household earns — in order to buy a median-priced home, online real estate firm Redfin said in a report this week.

And that was before new data Thursday showing mortgage interest rates shot up again to a fresh two-decade high this week, as measured by mortgage giant Freddie Mac, and home prices 澳洲幸运5官方开奖结果体彩网:posted a 2.8% year-over-year gain in September according to the National Association of Realtors.

Multiple 澳洲幸运5官方开奖结果体彩网:measures of home affordability all 澳洲幸运5官方开奖结果体彩网:tell the same tale: Soaring home prices combi🐻ned with the highest mortgage rates in decades are making it nearly impossible for first-time buyers to afford a house. And the problem is feeding on itself. Homeowners are reluctant to sell and 澳洲幸运5官方开奖结果体彩网:give up ultra-low mortgage rates they secured during the pandemic💎, so there is hardly anything 🦹available to buy.

“In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high interest payments,” Redfin economics research Lead Chen Zhao said in a statement. “But that’s not what’s happening now: Although new listings are ticking up slightly, inventory is still near record lows as homeowners hang onto their low mortgage rates—and that’s propping up prices.”

Redfin’s affordability calculation assumes a 20% down payment, and that a mortgage payment has to take up less than 30% of household income to be considered “affordable,” (a widely-used s🔜tandard).

Whether home prices are at record highs or not depends on how you measure them. By Redfin’s reckoning, the typical home sold for $420,000 in August, up 3% over the year and just $12,000 less than the all-time high reached in 2022. (Other measures, such as the S&P CoreLogic Case-Shiller Home Price Index show home prices once again hit record highs this summer.) Combine that with the 7.07% average rate offered for a 30-year mortgage in August, and you get a required household income up 15% from a year ago, and 50% from the start of the pandemic, according to Redfin.

Since August, the average rate offered for a 30-year mortgage has surged to 7.63%, a fresh high since late 2000, according to Freddie Mac. Mortgage rates are linked to yields on 10-year Treasurys, which are influenced by investor fears about inflation,𝓡 and whether the Federal Reserve will rais🌳e its influential interest rate to subdue price increases. 

澳洲幸运5官方开奖结果体彩网:Yields jumped this week after a report showed U.S. consumers 澳洲幸运5官方开奖结果体彩网:went on a spending spree in September, potentially putting upward pressure on inflation and stoking fears that the Fed will keep interest rates higher for longer in response.

That leaves buyers having to make compromises if they want a house, Zhao said.

“Buyers—particularly first-timers who are committed to getting into a home now—should think outside the box,” Zhao said in a statement. “Consider a condo or townhouse, which are less expensive than a single-family home, and/or consider moving to a more affordable part of the country, or a more affordable suburb.”