Sep 29, 2022 - Economy

Why homes sales are cratering in one chart

Cities with the biggest change in annual income needed to afford a home, 2020 to 2022
Data: Zillow; Table: Kavya Beheraj/Axios

Pending home sales, or contract signings to buy existing homes, fell again in August, according to data from the National Association of Realtors out Wednesday. It's the seventh month this year they've dropped, as rising mortgage rates put already high home prices out of reach for a lot of people.

Why it matters: A quick glance at that chart up there explains a lot. The minimum income needed to afford a typical house doubled since 2020 in several major metro areas, according to data from Zillow.

  • Prices for houses are bananas compared to where they were just a couple of years ago.
  • Pending home sales are at their lowest levels since 2011, with the exception of a brief period in 2020 when the country went into lockdown, Bloomberg noted.

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