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Higher Home Prices and Higher Rates Mean Bigger Affordability Hurdles for the U.S. Consumer

Abstract: In the U.S., homeownership is often described as part of the “American dream,” a way for consumers to accumulate wealth and gain other economic benefits. Almost two out of three U.S. households own the home they live in, a relatively stable amount over the last decade. Buying a home is usually the largest investment that a consumer will make, and the purchase price usually far exceeds what most can afford out of their current savings. In 2022, roughly 70% of home purchases were made with the help of mortgage financing.

Keywords: Urban; Rural; Regional; Real Estate; transportation economics;

JEL Classification: R21; R31;

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Chicago Fed Letter

Publication Date: 2023-08

Volume: no 481