Michigan's average monthly rent is $878 for a one-bedroom unit. | Canva, edited in Canva
Michigan's average monthly rent is $878 for a one-bedroom unit. | Canva, edited in Canva
Inflation is pricing many potential home buyers out of the market as housing prices continue to soar. According to results from Freddie Mac's Federal Home Loan Mortgage Corp. poll, 62% of Americans are somewhat or very concerned about being able to afford their housing.
The data from the poll reflects that 69% of Americans are concerned about mounting housing costs and 58% of renters have seen a price hike in the past year. Nearly 1 in 5 (19%) who experienced a rent increase say they are extremely likely to miss a payment, while 38% say they are somewhat likely.
“The surge in rents that took place over the last 12 months has created even greater housing uncertainty for the most vulnerable renters,” Kevin Palmer, head of Freddie Mac Multifamily, said in a press release. “Our survey shows that the national housing affordability crisis is worsening, and that inflation is a key driver."
On average the state of Michigan saw a 21.94% rise in one-bedroom rent prices from March 2020 to June 2022. As of June, the state's average monthly rent is $878 for a one-bedroom unit.
A Wall Street Journal report states that the National Association of Realtors’ housing-affordability index was 98.5 in June, its lowest point since June 1989 when it was at 98.3. The index takes into account mortgage rates, the cost of single-family homes and family salaries.
The Wall Street Journal says "consumer sentiment toward the housing market has worsened alongside affordability." The Federal National Mortgage Association Fannie Mae surveyed consumers in July and found that only 17% of Americans said it was a good time to buy a home, compared to 28% a year ago. Additionally, the percentage that think it's a good time to sell a home fell to 67% from 75% a year earlier.
Existing homes sales have fallen for five consecutive months, the Wall Street Journal reports. However, potential buyers are concerned that they may be priced out of the housing market as interest rates continue to climb. The current housing market is at one of its lowest points of affordability in recent decades.
On Aug. 10, the Bureau of Labor Statistics (BLS) released the Consumer Price Index (CPI) data for the 12 months ending July 2022. The data showed an 8.5% all-items annual increase with the biggest reasons being increases in the price for food, housing and electricity.
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