Freddie Mac reported on Thursday that its weekly average 30-year fixed mortgage rate rose to 4.47%, the highest since January 2014. Unfortunately, home prices have risen since January 2014 as well.
And home prices are growing at a rate of three times that of average hourly earnings for most workers.
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But what about entry-level housing? John Burns Consulting has a nice study on entry-level housing rising at a national average rate of 9%.
And as Selma Hepp reported, there were 30% fewer homes below $1M available for sale in Q1 in LA and greater Burbank/Glendale/Sherman Oaks areas inventory below $1M dropped by almost 50% (almost 1,000 fewer homes!)
Of course, Washington DC is the slowest growing MSA in the nation (and it STILL feels expensive!).
What is tragic about rising home prices, particularly for entry level housing? The tragedy is that the Federal government devotes (or distorts) significant resources towards “affordable housing” that isn’t even affordable! Plus we have the Federal Reserve’s low interest rate policies that have created asset bubbles and local counties that have restrictive land (zoning) laws that choke-off new supply.
Well, at least the San Francisco Bay area only rose by 14%!
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