Home buyers in Appalachia and the Deep South are currently seeing the best deals, according to a study from luxury real estate agency RubyHome.
In the second quarter of 2022, the median sale price of a home in the United States was $440,300, according to data from the Department of Housing and Urban Development, marking a 36% rise from $322,600 in the second quarter of 2020. The analysis by RubyHome, however, found that the average home price in West Virginia is a mere $75 per square foot.
“This data offers a fascinating insight into the disparities in house prices and affordability,” a spokesman for RubyHome said in a statement provided to The Daily Wire. “West Virginia stands out at the top despite having one of the lowest average household incomes in America.”
Indeed, although typical household income in West Virginia is a relatively low $65,332, the average house price of $129,103 implies that residents are witnessing an income to cost ratio of 50.6%. Residents of Mississippi and Arkansas, where families earn $65,136 and $69,357, respectively, are seeing house prices of $157,828 and $169,867, respectively, implying income to cost ratios of 41.3% and 40.8%.
The study comes as the American housing market witnesses turmoil due to a variety of economic factors, including supply chain bottlenecks and labor shortages. The other states in the top ten — Oklahoma, Kentucky, Alabama, Kansas, Louisiana, Iowa, and Indiana — are predominantly located in the Midwest and South.
Meanwhile, the 30-year fixed mortgage rate has remained below 3% for much of the past two years, according to data from government-backed mortgage company Freddie Mac. Since the beginning of the year, however, the rate has surged from just over 3% to reach 6.9%, including a jump of nearly 1% in less than one month.
“Homebuilder confidence has dropped to half what it was just six months ago and construction, particularly single-family residential construction, continues to slow down,” Freddie Mac Chief Economist Sam Khater said in a statement.
Noting the rapid erosion of housing affordability, the National Association of Home Builders recently admonished President Joe Biden for claiming that his administration has made “some progress in the fight against higher prices,” for which rising shelter expenses are largely responsible. “If President Biden is truly serious about fighting inflation, he needs to address the nation’s growing housing affordability crisis,” National Association of Home Builders Chairman Jerry Konter said last week.
Interest rates across the economy have increased as the Federal Reserve introduces a contractionary monetary policy regime. The central bank raised the target federal funds rate by 0.75%, a move which followed two identical hikes in June and July, in an attempt to relieve persistent inflationary pressures.
The economy is a primary issue on the minds of voters weeks before the midterm elections, with 84% considering the topic to be primary, according to a poll from ABC News and The Washington Post, which also revealed that 74% of Americans believe the economy is in bad shape. The Republican Party leads the Democratic Party by a 16% margin and a 19% margin with respect to trust in respectively handling the economy and inflation.