Mortgage: Impossible
Homeownership is out of reach for the average American family. Unless something changes, houses will only be a plaything for the rich rather than a place to live.
American house prices have defied gravity. Despite one of history's most aggressive interest rate hiking cycles, home prices have marched ever higher. As a result, the white-picket-fence American dream is dead. Homeownership is now out of reach for the average family. There are three reasons for this: First, saving for a deposit takes over a decade. Second, mortgage payments have soared. And third, saving or paying down a mortgage is getting less impactful. Homeownership will remain a pipe dream for many unless something dramatic fixes affordability.
It now takes a helluva long time to save for a house deposit. Using the latest numbers, it would take the average American household 12 years to save for a deposit—a seventh of their life. This calculation assumes a 20% deposit and that families can save 10% of their pre-tax income. It also considers a median household income of $74,580 and a median house price of $431,000.
This metric relies on averages, though. It doesn’t reflect every no…