The dream of owning a home is out of reach for 4 million Americans
Although quickly rising mortgage rates are already appearing to cool overheated housing markets, they are putting the homeownership dreams of millions of Americans even further out of reach, researchers and housing industry experts said.
This has priced out about 4 million renters over the past year alone, said Daniel T. McCue, senior research associate at the Joint Center for Housing Studies.
Rents shot up as well, especially for single-family homes that served as remote office spaces for families during the pandemic.
Investor holdings accounted for nearly 30% of all homes sold during the first quarter of this year, Harvard's housing studies researchers noted, citing CoreLogic data.
In early 2022, homeownership rates for Black and Hispanic households were 45.3% and 49.1%, respectively.
By comparison, White households had a home ownership rate of 77%, researchers wrote, citing US Census Housing Vacancy Survey data.
About 10% of households were behind on their rent or mortgage payments during the period of December 2021 to April 2022.
Still, he cautioned, rising mortgage rates could ultimately price people out of homeownership.
Mortgage rates tend to track 10-year US Treasury bonds.
But mortgage rates are indirectly impacted by the Fed's actions on inflation.
As investors see or anticipate rate hikes, they often sell government bonds, which sends yields higher and with it, mortgage rates.
Should monetary policy tighten and spur an economic downturn, that presents an even greater concern, Harvard researchers wrote.