Record High House Prices in US Strain Annual Budgets
The Kobeissi Letter, a renowned analyst of global capital markets, has unveiled fresh data shedding light on the US real estate landscape. Escalating costs associated with housing, both for purchase and rent, are painting a vivid picture of the challenges plaguing the market.
The latest data reveals that the average monthly price of purchasing a house in the US has surged to an all-time high of $2,748, marking a staggering 90% increase since 2020. Additionally, this surge is visualized by a steep upward trajectory depicted by the parabolic yellow line on the chart.
The Burden on US Households
The graph’s blue line illustrates the median monthly expense for renting an apartment. According to the data, this value has soared to an all-time high of $1,859 per month. Translated annually, this equates to slightly over $22,000.
In annual terms, an American now needs to allocate nearly $33,000 towards their home purchase. These figures, when juxtaposed with average incomes in the US, expose the glaring disparity. The $33,000 expenditure accounts for a substantial 46% of the median annual pre-tax income in the country. Furthermore, post-tax house buyers must face the daunting reality of dedicating approximately 70% of their income to cover household expenses.
Presidential candidate Robert F. Kennedy Jr. has recently voiced grave concerns about the growing influence of investment firms within the housing market. Additionally, Kennedy highlights instances where prospective homebuyers are outbid by cash offers in the final moments. His remarks spotlight a broader issue of affordability and access within the housing sector.