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American dream of owning a home out of reach for many in tight markets – The Guardian

Samantha Hawkins had a clear vision for her first home: the 29-year-old from Austin, Texas, wanted a detached house surrounded by a yard for her dog, a garden and a stable space where she could put down roots.

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Samantha Hawkins had a clear vision for her first home: the 29-year-old from Austin, Texas, wanted a detached house surrounded by a yard for her dog, a garden and a stable space where she could put down roots.

By January, when she bid $230,000 on a tiny, yardless condo converted from a rental studio, she had “bent on a lot of the things I valued”. She found herself beaten by investors willing to pay cash far above the listing price, and buy sight unseen in gameshow-like bidding wars.

The 496-sq-ft condo was one of the very few Austin homes she could still afford as prices soared in January. Her offer put her among the finalists, but at the last minute, the seller threw a new curveball: the other bidders had signed an appraisal waiver. Hawkins needed more cash she didn’t have, so she “bowed out”.

Across the US, many have faced similar roadblocks: prices popped as a confluence of forces suppressed supply and inflated demand, leaving many middle- and lower-income buyers with a dwindling number of housing options, or forcing them into rentership.

Samantha Hawkins at her apartment in Austin. Photograph: Sergio Flores/The Guardian

Now, with interest rates rising and the housing market cooling, things are supposed to be different. So far they aren’t. Nationally, house prices hit an all-time high in June of $416,000, up 13.4% from a year ago.

The challenges Austin buyers are still experiencing show just how difficult the dream of owning your own home has become for a broad swath of Americans.

“I’ve worked really hard the last year or two and made the right choices financially to try to have a chance, but it seems like I can’t really win in this market,” Hawkins said.

The problems plaguing tight markets nationally have all hit Austin. Hawkins is competing with investors who now account for more than 30% of single-family home sales, Airbnb operators and any number of the about 125 people moving to Austin daily amid dizzying job growth. Meanwhile, builders haven’t kept pace with demand and zoning laws limit new multifamily housing that could provide relief.

May’s median sale prices in Austin and surrounding Travis county hit new peaks of $676,000 and $625,000, respectively – up from around $400,000 just before the pandemic. That’s put pressure on the rental market, pushing the …….

Source: https://www.theguardian.com/business/2022/aug/19/us-housing-prices-buying-rental-increases-home-supply

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