Incomes not matching housing prices


CHARLOTTE (FOX 46 CHARLOTTE) — As house prices continue to increase, closing deals are becoming more unaffordable.

“With my first-time buyers, it’s kind of a tough game right now,” Broker Erika Wishnefsky said.

With more than two decades in the real estate industry, she said there is one thing that sets the 20 and 30-year-old who are entering the housing market apart from other generations.

“They are coming in with financial preparation that I have never seen before in any other generation,” Wishnefsky said.

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They are also facing one of the most competitive markets in recent U.S. history. Sellers are upping prices and incomes are not matching.

The median household would need 32% of its income to cover mortgage payments, according to the Federal Reserve Bank of Atlanta.

“The market demands what people are willing to spend,” Senior mortgage loan officer Lorri Hoffman said

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She said there are two things first time buyers have to consider before purchasing – due diligence fees, which can be in the thousands, as well as a gap in the loan process.

Homes in the Charlotte area are going for 15-20% over asking price, so buyers are paying more than what their home is worth in the eyes of lenders.

“Let’s just say, if you said, ‘I am comfortable spending $315,000 to be the best offer,’ well the appraisal may not come in at $315,000 it might come in at $300,000, so there is a $15,000 gap. Where will those funds come from because most people don’t have an extra $15,000 sitting in their bank account,” Hoffman said.

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