With the overall decrease of people investing and buying houses, mortgage prices are driving the market into a crisis by increasing heavily. Rather than investing time and money, people are choosing to rent apartments and rooms, rather than buying brand new houses. Young adults on average are moving out at the age of 19. While they move out at nineteen, the average age of buying a house in the United States is 32 according to The National Association of Realtors.
30% of earned income is spent on rent alone
While renting a home or apartment may seem like a great choice, Americans are currently spending most of their earned income on rent. Approximately 30% of their earned income is spent on rent alone. This 30% does not account for light, water, or food. Due to stable housing decreasing, rentable apartments and homes are increasing in price. Although mortgage, rent, and income are increasing, the amount of increase in income does not balance out the increase in the monthly mortgage.
The abundance of new homes, and the scarcity of buyers
The mortgage crisis that is coming fast is being caused by an abundance of new homes, and the scarcity of buyers. These new houses are not being bought because of various reasons including; student debt, household debt, and a decrease in overall demand for houses. This upcoming crisis is truly a crisis that may affect hundreds and thousands of hardworking people. As Americans fail to pay their high monthly mortgage, there is a growing possibility of eviction. It only takes one eviction to completely alter a person’s world. This one-time eviction may cause and lead to a larger problem, homelessness.
45 million adults do not have a credit score at all
Although taking out loans is an option, with the current credit scores, this option is not beneficial for everybody. There are over 45 million adults in the United States that do not have a credit score at all, harming their chance of owning a home.