Confirmed: Fewer families are eligible to buy a home in Puerto Rico

Affordable Housing Index prepared by the Technical Studies Corporation (ETI) It fell in March of this year, after a continuous increase in housing prices and deteriorating purchasing power due to inflation, making it difficult for families to qualify for it. Mortgages.

“In recent months, the affordable housing index has deteriorated 69% in March 2022, down 31 percentage points from March 2020″, informed economist Leslie Adams, director of economic analysis and policy at ETI. In other words, the typical household has only 69% of the income necessary to qualify for a mortgage loan, factoring in a 20% down payment.

The Affordable Housing Index, prepared by ETI, measures whether the typical household contributes 20% up front Buying a home She may or may not qualify, based on average income, for a home purchase loan. A value equal to 100% means that the household has the necessary income to qualify based on the average market rate. A value above this limit assumes that you have enough income to qualify for a home loan, while values ​​below this limit reflect the opposite.

Adams explained that this indicator reached 61% in January 2011 and was gradually improving, reaching a maximum of 100% in March 2020. This improvement is attributed to the historically low levels of interest rates that prevailed in the market during this period, as well as the price correction experienced by it. The real estate market, Adams said.

“There is no doubt that the increase in average home prices and the deterioration of purchasing power due to inflation is already affecting people’s ability to buy homes. Figures from the Office of the Commissioner of Financial Institutions show that Total contracted home sales from 3,286 in the first quarter of 2021 to 2,776 in the first quarter of 2022primarily attributable to an 18% contraction in sales of used housing units,” the economist commented.

Adames noted that the index reflected that the latest figures published by OCIF as of March considered an average selling price of $193,813, and a 30-year fixed rate of 4.17% for March.

The outlook for next year could be complicated if the upward trend in 30-year fixed-rate mortgage rates continues.. This rate has already exceeded 6% and will be an additional factor that will add pressure on the affordability of housing in the local market and, accordingly, on mortgage facilities and home sales,” Adames analysis.

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