So the current real estate market has been interesting for the last year. Affordability has been a continuing growing problem, with no real end in sight to tackle lowering housing prices. According to Forbes the average sales price for new homes in the U.S. is roughly $540,600, while the average existing home value is around $372,995. Because a few ultra-luxury homes can skew the "average," economists prefer the median home price. The median price for a single-family home nationwide is currently $436,523. For the purposes of this blog, I will focus on the nationwide home price of $436,523. It’s hard to even fathom one’s average everyday working people salary being able to afford a home at the price of $436,523 with today interest rates at 6.53%. Especially given the fact that according to Forbes the average annual salary in the U.S. is $64,505, while the median sits at $83,730 for households and roughly $63,360 for full-time individual workers. Salaries vary widely depending on location; for example, Massachusetts boasts an average of $83,050, compared to $49,740 in Mississippi. And with home prices for single family homes being between the 372,995 to 436,532. That makes the average monthly mortgage payments (Depending on the area) $2200 to $3500.
With the new Federal Reserve Chair Kevin Warsh the possibility of money being printed trying to bring down inflation. Also the current administration is calling to bring down interest rates in order to try to make the current overpriced housing market more affordable. Plus flooding the economy with money may boost confidence wtih real estate, stock market, and bond investors. Also according to various news media sources:
- Eliminating Forward Guidance: Warsh has drastically shortened FOMC statements and ended the practice of providing investors with hints about the Fed's upcoming actions.
- Sweeping Task Forces: He launched five task forces to re-evaluate core Fed functions, including how it measures inflation, the role of artificial intelligence in the economy, and paths to reduce the size of the Fed's $6.7 trillion balance sheet
CNBC
- Alternative Inflation Data: Warsh has advocated for shifting away from the traditional Core PCE metric, preferring to measure inflation by looking at the median of up to one billion real-time public and private prices.
Investopedia
- Commitment to Price Stability: Despite facing pressure from political leaders, Warsh has reaffirmed a strict commitment to the 2% inflation target and pledged to maintain his independence while making high inflation "a thing of the past"
So with all of this being said we shall see by 2027 how Kevin Warsh new processes, procedures, and new Federal Reserve polices effect the overall United States Economy.
If one is interested in selling a distressed property, please contact Patterson L. Properties LLC. at PttrsLr1@gmail.com. We will be more than happy to assist you.
