Kimber White (pictured top), president of NAMB, joined us recently on an episode of MPA Talk to discuss affordability, our monthly focus. He discussed why affordability has become such a pervasive topic in the industry.
Click here to listen to this episode of MPA Talk.
“Affordability has become a big topic because we have the largest wealth inequality gap in modern history,” White told Mortgage Professional America. “I’ve been in this business for 40 years, and people talk about the interest rates being in the 15%, 16%, 17% range in the 80s, but the cost of living kept up basically with those homes. We didn’t have the insurance, we didn’t have the taxes that we have now.”
Income not keeping up
White believes that home prices rose during the pandemic while wages didn’t keep up. That not only made it harder for first-time buyers to get into their first home, but also caused insurance and property tax valuations to soar.
“When you fast forward to where we are now, with the overvaluation at times on homes from the COVID-era equity build,” White said. “Interest rates hovered for a long time in the 7s to around 8%. Yet the income has not kept up. So when we look at between the 80s and now, the income that would need to be kept up to today is nowhere close to that. So that’s why this affordability issue has been talked about, but nothing has been done.”
