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M REPORT | 55 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Affordability Easing in Some U.S. Metros Are rising mortgage rates still holding back prospective buyers? Here's what's happening in the buyer's market. P rospective buyers received a bit of good news, as NerdWallet reported more homes became affordable in Q 3 2022 for first-time buyers. Overall, home affordability improved in 25 metros across the United States, with metros in Rust Belt being the most affordable. Pittsburgh saw homes listed at 2.9 times first-time buyer incomes as the most affordable metro stud- ied. It was followed by Cleveland (3.3); Buffalo, New York (3.5); St. Louis (3.6); and Detroit (3.8). The West Coast continues to be the nation's most unaffordable market, with Los Angeles having homes listed at 11 times first-time buyer incomes. San Diego (9.2); Miami (8.8); San Jose (8.6); and San Francisco (7.6) joined the list. Cleveland had the nation's low- est list price of Q 3 at $223,229, and San Jose reported the highest at $1.39 million. NerdWallet also reported that the number of homes for sale rose 50% from the last quarter across the nation. Also, not one city across the 50 metros studied saw a decline in listings from quarter to quarter. Five metros saw active listings rise by 100% or more—Salt Lake City (+100%); Nashville, Tennessee (+107%); Austin, Texas (+115%); Phoenix (+115%); and Raleigh, North Carolina (+120%). Mortgage rates continue to be a sore spot for buyers. NerdWallet added that a $350,000, 30-year mortgage at 5% interest—where rates were in April—results in a $2,500 monthly payment. However, a rate of 7%—in the range of current rates—causes that payment to grow to $3,000. Freddie Mac reported the third- consecutive decline in mortgage rates on December 1. The average 30-year fixed-rate mortgage came in at 6.49%—down from the prior week's rate of 6.58%. Last year at this time, the 30-year fixed-rate mortgage stood at more than half that total at 3.11%. Report Examines Barriers Standing in the Way of Black Homeownership "It is the sacred duty of community leaders, policymakers, and financial industry specialists to lift communities so that all children can thrive and grow up with opportunities for good health, wealth, and happiness in their lives," NAREB President Lydia Pope said. W orking toward dismantling the institutional racism that has plagued Black families for generations, the National Association of Real Estate Brokers (NAREB) has released its latest iteration of the State of Housing in Black America Report report, which aims to provide a comprehensive annual analysis of Black homeownership and the historic barriers they face when seeking to purchase a home. "We often think of wealth in terms of cash, investments, and even Bitcoin, but wealth is also found in the water we drink, the air we breathe, and the land on which we live," said Lydia Pope, NAREB's President. "It is the sacred duty of community leaders, policymakers, and financial industry specialists to lift communities so that all children can thrive and grow up with op- portunities for good health, wealth, and happiness in their lives." Moreover, the report states: "Race has historically been the main determinant of the placement of toxic facilities in the United States. And decades of redlining and segregation [have] ensured that Black inner-city communi- ties are home to some of the most deteriorated infrastructure in the nation. Black communities are on the front lines of climate change as a lack of resources and outdated housing stock and infrastructure … make them more vulnerable to the adverse effects of extreme weather and climate change." Overall, during the first quarter of 2022, Black homeownership was down to 44.7% from 45.3% reported in 2020. In 1970, that disparity rate stood at 23.8%, but even in 2022, the homeownership gap was still over 30%, continuing the trend of expanding homeownership rates between Blacks and whites. Equally important, the current Black homeownership rate remains far below its peak recorded in 2004, when Black homeownership exceeded 49%. The report also analyzes the recent trend of non-deposit lend- ers, such as Fintech companies, increasing their market share of mortgages, and the impact on other bank-related functions. "Higher profit, more lucrative investment strategies for banks [have] come at the expense of supporting homeownership and wealth building in low-income communities and communities of color," the report states. "Federal Reserve data indicate that in the third quarter of 2021, residential real-estate loans hit a historic low as a percentage of total assets (10%) at U.S. banks, whereas the share of safe assets—investments such as cash, Treasuries, and government- guaranteed securities—increased from the prior year. The closing of branches by larger banks in low- income areas and profit-maximiz- ing strategies such as high overdraft fees, debit card swipe fees, ATM withdrawal fees, and wire transfer fees, among other charges, have particularly impacted low-income customers and customers of color." The report further found that 72% of Black applicants compared to 63% of white applicants applied for loans at independent companies in 2021, while white banks continue to disproportionately attract white borrowers at a rate of 33% to 20%.