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US Housing Affordability Is Set to Drop to 2007 Levels This Year, S&P Says

  • Mortgage payments will be 28% of income for first-time buyer
  • Saving for down payment seen twice as long as before pandemic
Bloomberg business news
We're Heading Into a Housing Recession: NAHB CEO

Housing affordability is set to worsen to levels last seen early in the financial crisis as rising mortgage rates compound high prices, according to S&P Global Ratings.

By the end of this year, mortgage payments will make up 28% of income for the typical first-time buyer -- the highest since the first quarter of 2007 -- assuming a 10% down payment, S&P North American Chief Economist Beth Ann Bovino said in a report. Mortgages shouldn’t exceed 25% of income to be considered affordable, per guidelines from the National Association of Realtors.