Interesting bit of information buried in “The State of the Nation’s Housing 2006” report, issued last week by Harvard’s Joint Center For Housing Studies.
While homeowners with annually adjusting mortgage rates are facing interest increases this year, including those with expiring teaser discounts, only about one in ten homeowners face higher mortgage payments this year,â€? remarks Nicolas P. Retsinas, director of Harvardâ€™s Joint Center for Housing Studies.
Fully eight in ten owners has no mortgage or a fixed-rate mortgage, and most owners with adjustable loans have an initial fixed-rate period of three or more years. Similarly, most interest-only loans extend for at least five years, leaving ample time to move, refinance, or incomes to grow before principal payments start coming due.
However, things aren’t great, for the majority of people:
The paradox of todayâ€™s housing market is that while more people are building home equity than ever before, slow growth in wages for households in the bottom three-quarters of the income distribution is not keeping pace with escalating housing costs. Amidst a housing boom, it is now impossible to build housing at prices anywhere near what low-income households can afford without subsidies.
And, they’re not going to get any better – because there’s going to be more and more competion for housing:
New household projections incorporating higher but more realistic immigrant assumptions suggest household growth will accelerate to 14.6 million over the next ten years from 12.6 million over the last ten. â€œStrong household growth, combined with record incomes and wealth, will lift housing investments to new highs next decade,â€? remarks Eric Belsky, executive director of the Joint Center.
Certainly, something to keep in mind next time someone spouts off about the coming danger of adjustable rate mortgages and debt.
Contact me to find or to set up an appointment to start your Boston condo buying process.
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Updated: January 2018