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House prices have sprinted a 50% marathon, mortgage rates did a pole-vault to 7%, and wages showed up wearing flip-flops. The result? The housing affordability gap grows wider than the Grand Canyon, pushing more into renting.

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MIND THE AFFORDABILITY GAP

Story: JPMorgan Chase Institute tallies the carnage: from 2019 to 2024, the average mortgage payment on a median-priced home doubled, while incomes for 25- to 44-year-olds rose 41%. Translation: Today’s rookie buyer must devote about 58% of after-tax pay to housing versus 40% five years ago. Down-payments ballooned alongside prices, and if you weren’t riding the stock-market rocket (spoiler: most middle-income savers weren’t), catching that balloon is tough. Worse, affordability fell hardest in suburbs, small metros, and rural zips, exactly where many fled for elbow room during the pandemic.

So What? Investors, this flips the script. Entry-level demand is bottlenecked, so single-family rentals and build-to-rent communities stand to hoover up would-be buyers who can’t clear the down-payment hurdle. Expect longer rental tenures, stickier occupancy, and heightened appetite for lease-to-own or shared-equity models. On the flip side, flippers banking on a big pool of first-time buyers may need to sharpen price points, or add a serious interest-rate buydown, to move inventory.

What’s Next? Keep an eye on July’s CPI and Fed-meeting tea leaves; a single quarter-point rate cut could free marginal buyers currently stuck on the fence. Watch suburban builders: if permits keep sliding, supply pressure will prop up resale values and rents well into 2026. Finally, track any policy buzz around first-time-buyer tax credits as Congressional chatter grows louder as the election season heats up.

Source: JPMorganChase

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2️⃣ Insurance: California’s FAIR Plan overhaul aims to shrink the “insurer of last resort” after policies exploded 139% in four years as wildfires keep fanning the premium flames. 🪺 More

3️⃣ Mortgages: Freddie Mac says 30-year rates dipped to 6.77%, the fourth straight weekly slide. 🪺 More

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