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Even if rates dropped to zero, typical homes would still be unaffordable for median earners in some major metro areas.
By Arnesa A. Howell
Are you an aspiring homeowner waiting for mortgage rates and home prices to fall before you jump in the market? You may be waiting in vain.
According to a recent Zillow analysis, a median-income family would either need home values to fall by a whopping 18 percent (from about $369,000 to $304,000), or mortgage rates to fall from June’s rate of 6.74 percent to 4.43 percent in order to afford a typical U.S. home. (The analysis assumes a 20 percent down payment on a 30-year fixed-rate mortgage, and defines an “affordable” purchase as requiring no more than 30 percent of household income.)
