Old North News

If you’re wondering how you’re going to pay your rent this month, you’re not alone. High inflation and other worsening economic conditions have contributed to a majority of Americans saying they are concerned about housing affordability.

More than half of Americans have already witnessed rent increases over the last year and an even greater majority fear they will be unable to pay their housing costs over the next 12 months, according to a recent poll. In North Carolina, rent prices have increased nearly 30% over the last two years.

“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 release. “Our survey shows that the national housing affordability crisis is worsening, and that inflation is a key driver."

Freddie Mac's Federal Home Loan Mortgage Corp. poll shows 62% of Americans are somewhat or very concerned about being able to afford their housing.

That worry is justifiable, as the National Association of Realtors’ housing-affordability index indicated that U.S. housing was more expensive in June than it has been for any month in more than 30 years, the Wall Street Journal reports. The index, which factors in family incomes, mortgage rates and the sales price for current single-family homes, fell to 98.5 in June — the lowest level since June 1989, when the index was at 98.3.

Poll results also show that 69% fear rising housing costs and 58% of renters have experienced rent increases in the last 12 months. Nearly 1 in 5 (19%) who experienced a rent increase admit they are now extremely likely to miss a payment, while twice that many (38%) say they are somewhat likely to do so.

The WSJ 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, those who think it's a good time to sell a home fell to 67% from 75% a year earlier.

Home sales have now declined for five consecutive months, the Wall Street Journal says. During the same time period, interest rates shot up while home prices steadily climbed, which led to more buyers being priced out of the market and to the sharpest erosion of affordability for the U.S. housing market in 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 reflected an 8.5% all items annual increase and some of the largest contributors were increases in the index for food, shelter and electricity.

On average, North Carolinians saw a 29.92% rise in one-bedroom rent prices between March 2020 and June 2022, when the state's average monthly rent cost is $1,116 for a one-bedroom unit, a survey of rental costs shows.