Connect with us

Business

The 3 factors it would take to make housing affordable are ‘very unlikely’

Published

on



During the pandemic, millions of Americans broke into the housing market thanks to sub-3% mortgage rates. But as mortgage rates and home prices started to climb—and while wages remained relatively stagnant—achieving the American dream feels further out of reach than ever. Indeed, the average age of a first-time home buyer climbed to an all-time high of 40 years, according to the National Association of Realtors. 

“The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory,” Jessica Lautz, NAR deputy chief economist and vice president of research, said in a statement. “The share of first-time buyers in the market has contracted by 50% since 2007—right before the Great Recession.”

While there’s been short-lived glimmers of hope that housing affordability could improve, like mortgage rates dropping from a 2023 peak of 8%, experts agree it’s “very unlikely” buying a home will become more affordable any time soon. 

According to Realtor.com data shared with Fortune, at least one of three things would need to happen: mortgage rates would need to fall to 2.65%; median household income would need to rise by 56%; or home prices would need to decline by 35%. For the mortgage calculations, Realtor.com assumed a 10% down payment, historical income data reflected median household income from the latest Census, and home prices are based on the National Association of Realtors existing home sales price, and mortgage rates came from Freddie Mac, Hannah Jones, Realtor.com senior economic research analyst, told Fortune.

The current mortgage rate is about 6.15%, which means the rate would have to drop several percentage points to reach 2.65%. Meanwhile, the median household income would need to be $132,171, but it’s currently only $84,763. Home prices would need to drop to $273,000, down from $418,000, assuming incomes, mortgage rates, and the income share remain unchanged, Jones said. To put it in perspective, home prices have risen more than 50% in just the past six years, so a drop that significant would be astounding.

Unrealistic options

While it may be helpful to put actual figures on what it would take to make housing affordable, these options don’t realistically align with today’s market reality. 

“The circumstances that lead to rates the sub-3% of 2020-2021 past were a worldwide, once-in-a-lifetime (hopefully) pandemic,” Max Slyusarchuk, CEO of A&D Mortgage, told Fortune. Meanwhile, “the last time we saw a 50%-plus increase in average wages was likely post-World War II, and I believe that took two-plus decades to realize.”

And then there’s the softening job market, in which job and wage growth is slowing, which Sean Roberts, CEO of offsite construction company Villa, said isn’t likely to change in the near- or medium- term. He also noted it would take “some massive economic shock” to get mortgage rates much lower than they are today, which is unlikely.

“The mortgage market is more disciplined and regulated, most homeowners have way more equity in their homes, there is a massive share of homes without mortgages on them at all, and a great many borrowers are locked in with low mortgage payments today,” Roberts said. 

More than 30 million homeowners don’t have a mortgage right now, and the share of homeowners who don’t have a mortgage payment rose to 40% in 2023, up from 33% in 2010. That reflects a trend toward outright homeownership and conservative borrowing, according to a Goldman Sachs note from July.

“We see the housing market remaining relatively stuck without major progress being made on affordability until we see income growth rapidly accelerate—unlikely—, mortgage rates decline very materially—unlikely—, home prices come down materially—unlikely,” Roberts added. 

In fact, Realtor.com forecasts only a 0.3% drop in mortgage rates, a 2.2% year-over-year increase in home prices, and only a 3.4% wage-growth increase.

And even if any of these factors were to come to fruition, we could end up with an extremely competitive housing market.

“We’re in a tough spot,” Slyusarchuk said. “The moment you make strides in any of these factors, what happens? More people are in the market buying and selling homes, which in turn increases the demand, which raises prices back up.”



Source link

Continue Reading

Business

Wife of Renee Good, the Minnesota woman killed in ICE shooting: ‘We had whistles. They had guns’

Published

on



The wife of Renee Good, the woman shot and killed in her car by a federal immigration agent in Minneapolis, says the couple had stopped to support their neighbors on the day of the shooting and described the mother of three as leaving a legacy of kindness.

“We had whistles. They had guns,” Becca Good said in a written statement Friday that was provided to Minnesota Public Radio.

The statement was her first public comment about the death of Renee Good, 37, who was killed Wednesday after three Immigration and Customs Enforcement officers surrounded her Honda Pilot SUV on a snowy street a few blocks from the couple’s home. Video taken by bystanders show an officer approaching the SUV stopped across the middle of the road, demanding the driver open the door and grabbing the handle.

The vehicle begins to pull forward and a different ICE officer standing in front of it pulls his weapon and immediately fires at least two shots at close range, jumping back as the vehicle moves toward him.

Trump administration officials have painted Renee Good as a domestic terrorist who tried to run over an officer with her vehicle. State and local officials in Minneapolis, as well as protesters, have rejected that characterization.

Becca Good has not responded to calls and messages from The Associated Press. Her statement provided no further detail about the day of the shooting and instead focused on memorializing her wife.

The couple had only recently moved to Minneapolis and were raising Renee Good’s 6-year-old son from a previous marriage.

Becca said Renee was a Christian who “knew that all religions teach the same essential truth: we are here to love each other, care for each other, and keep each other safe and whole.”

She thanked the people all across America and the world who had reached out in support of their family.

“Renee sparkled. She literally sparkled,” Becca Good wrote. “I mean, she didn’t wear glitter but I swear she had sparkles coming out of her pores. All the time. You might think it was just my love talking but her family said the same thing. Renee was made of sunshine.”

Far from the worst-of-the-worst criminals President Donald Trump said his immigration crackdown would target, Good was a U.S. citizen born in Colorado who apparently was never charged with anything beyond a single traffic ticket.

In social media accounts, she described herself as a “poet and writer and wife and mom.” She said she was currently “experiencing Minneapolis,” displaying a pride emoji on her Instagram account. A profile picture posted to Pinterest shows her smiling and holding a young child against her cheek, along with posts about tattoos, hairstyles and home decorating.

Her ex-husband, who asked not to be named out of concern for the safety of the two now-teenage children he had with Renee Good while they were married, told the AP on Wednesday that he had never known her to participate in a protest of any kind.

Becca Good said the couple, who had previously lived in Kansas City, Missouri, had settled in Minneapolis after an “extended road trip.” She said people they encountered in the Twin Cities had provided a strong sense that “they were looking out for each other.”

“We were raising our son to believe that no matter where you come from or what you look like, all of us deserve compassion and kindness,” Becca wrote. “I am now left to raise our son and to continue teaching him, as Renee believed, that there are people building a better world for him. That the people who did this had fear and anger in their hearts, and we need to show them a better way.”



Source link

Continue Reading

Business

Bessent’s visit to Minnesota comes with more vows to crack down on fraud as tensions flare with state, Somalia government

Published

on



The Treasury Department is taking a closer look at financial transactions between Minnesotan residents and businesses and Somalia as the federal government ramps up its immigration crackdown in the state, Treasury Secretary Scott Bessent told reporters on Friday during a visit to the state.

Bessent said his agency has launched a series of actions to combat fraud in the state and has launched investigations into four businesses that people use to wire money to family members abroad to do more to scrutinize transactions. He did not name the businesses.

His visit to the state coincides with protests in Minneapolis after an Immigration and Customs Enforcement officer fatally shot a woman in a residential neighborhood south of downtown on Wednesday, leading to a clash between federal and local leaders.

President Donald Trump has targeted the Somali diaspora in the Democratic-led state with immigration enforcement actions and has made a series of disparaging comments about the community, directing Bessent to uncover more fraud. The Treasury first announced last month that it would begin targeting money service businesses, focusing on remittances to Somalia.

The department’s actions have been prompted in part by a series of fraud cases, including a nonprofit called Feeding Our Future accused of stealing coronavirus pandemic aid meant for school meals. Prosecutors have put the losses from that case at $300 million.

Gov. Tim Walz, before he ended his bid to serve a third term this week, said that fraud will not be tolerated in Minnesota and that his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.” Walz, who came under heavy criticism from Republicans who said his administration should have caught the Feeding Our Future fraud earlier, said he was “furious” with “criminals that preyed on the system that was meant to feed children.”

The founder of Feeding our Future, Aimee Bock, was charged with multiple counts involving conspiracy, wire fraud and bribery and was convicted in March while maintaining her innocence.

Bessent declined to comment on specific investigations but said he had met with several financial institutions on Friday to ask them to do more to prevent fraud. The department has not disclosed which institutions Bessent spoke with.

Key Treasury actions include Financial Crimes Enforcement Network investigations into Minnesota-based money services businesses, enhanced transaction reporting requirements for international transfers from Hennepin and Ramsey counties, and alerts to financial institutions on identifying fraud tied to child nutrition programs.

“Treasury will deploy all tools to bring an end to this egregious unchecked fraud and hold perpetrators to account,” Bessent told reporters on Friday.

Bessent’s announcement was met with some criticism. Nicholas Anthony, a policy analyst at the libertarian Cato Institute, said Bessent is “building a legacy of financial surveillance and control.”

“The announcement that he is stopping Americans from sending their money abroad and increasing surveillance under the Bank Secrecy Act should be condemned,” Anthony said.

Some Somali leaders said last month they had received anecdotal reports about community members being detained by federal agents but had no details. Those leaders and allies including Walz and Minneapolis Mayor Jacob Frey have vowed to protect the community.

During a speech on Thursday about the Republican Trump administration’s economic agenda at the Economic Club of Minnesota, Bessent referred to the alleged fraud, without mentioning the Somali community that his department is targeting.

“I am here this week to signal the U.S. Treasury’s unwavering commitment to recovering stolen funds, prosecuting fraudulent criminals, preventing scandals like this from ever happening again, and investigating similar schemes state by state,” Bessent said.



Source link

Continue Reading

Business

Telluride Ski Resort begins to reopen after striking ski patrollers accept a contract

Published

on



Telluride Ski Resort in southwestern Colorado began to reopen Friday after a vote by striking ski patrollers to accept a contract and return to work.

The resort shut down Dec. 27 after the Telluride Professional Ski Patrol Association rejected a company pay proposal. The resort remained closed except for beginner carpets and a lift serving two beginner runs that were staffed this week by managers and temporary ski patrollers.

With help from artificial snowmaking and a foot (30 centimeters) of recent snowfall, more lifts and runs will open starting this weekend, resort officials said in a statement.

“We are confident that this last offer represented a fair compromise,” resort representative Steve Swenson said in the statement.

Neither the resort nor the ski patrol union divulged details of the deal endorsed by the union with a Thursday vote. Negotiations had been ongoing since June.

The union sought pay increases from $21 to $28 an hour for new patrollers and from as little as $30 to almost $50 for the most experienced ones.

“While we are ultimately very disappointed to not address our broken wage structure, we are immensely proud of our efforts that have led to this financial movement. We are even prouder of the recognition and implementation of our supervisors into the unit,” read a union statement on social media Thursday.

Ski patrollers elsewhere in the Rocky Mountain region have been unionizing. Some argue for more pay on the grounds that the cost of living in ski towns is high and that they are responsible for safety.

Patroller duties include attending to injured skiers and the controlled release of avalanches with explosives when nobody is in range.

An almost two-week ski patrol strike a year ago closed many runs and caused long lift lines at Utah’s Park City Mountain Resort. That strike ended when Colorado-based Vail Resorts acceded to demands including a $2-an-hour base pay increase and raises for senior ski patrollers.

Join us at the Fortune Workplace Innovation Summit May 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.



Source link

Continue Reading

Trending

Copyright © Miami Select.