The Federal Reserve Bank of Atlanta's Home Ownership Affordability Monitor (HOAM) revealed that affordability has worsened over the last decade.
According to the HOAM Index, a median American household must spend 42.9% of its income to afford a median-priced house.
The HOAM Index developed by the Atlanta Fed measures the ability of a median-income household to absorb the estimated annual costs associated with owning a median-priced home.
- The last time the Index was as high was in August 2006, when a median household had to spend around 41% of its income.
- The Index jumping to 42.9% means a median household has to spend $607 more per month, compared to last year when they had to pay 32.6% of their income just over a year ago.
- Rising interest rates and steep home prices make homes more unaffordable for average homebuyers.
