Homeownership becoming less attainable due to high mortgage rates and insurance costs
Inflation spiked to a 40-year high of over 9%, causing the Federal Reserve to raise its benchmark interest rate from virtually zero to more than 5%
Insurance premiums for homeowners increased by 11.8% under President Biden compared to 5.8% under President Trump
Maintenance and repair of dwellings saw a significant jump of 30.8% under Biden
Mortgage rates have increased from around 3% at the start of 2022 to over 7%
Private auto insurance premiums increased more under Biden (8% compared to 17.3%)
Sales of existing homes have dropped by 4.3% between February and March
Homeownership is becoming less attainable due to high mortgage rates and insurance costs. The climate crisis is causing insurance price hikes, as insurers anticipate more damage payouts from increased frequency and intensity of weather events. Some Americans are opting for rentals or relocating to different areas due to the high costs of owning a home.
Aspiring homeowners might be out of luck this year, and high mortgage rates are only part of the problem. Rising insurance costs could keep homeownership out of reach for many. An April analysis found that under President Trump, insurance premiums for homeowners increased by 5.8%, while under President Biden, they rose by 11.8%. Private auto insurance premiums also increased more under Biden (8% compared to 17.3%). Maintenance and repair of dwellings saw a 11.5% increase under Trump and a significant jump of 30.8% under Biden.
In addition to insurance and mortgage costs, inflation has spiked to a 40-year high of over 9%, although it has since dropped to 3.5%. The Federal Reserve's response has been to raise its benchmark interest rate from virtually zero to more than 5%, which in turn has driven up mortgage rates from around 3% at the start of 2022 to over 7%. This increase in mortgage rates has led to higher monthly payments, causing a freeze in the US housing market. Prospective sellers are hesitant to give up lower interest rates they've locked in, while potential buyers are deterred by near-record prices and increased monthly mortgage payments. As a result, sales of existing homes have dropped 4.3% between February and March, the largest percentage decline since November 2022.
The current affordability crisis has led some experts to predict a buying boom once interest rates fall. However, with the Federal Reserve hesitant to cut rates due to persistent inflation, it remains to be seen when or how this situation will improve for prospective homeowners.
Insurance costs for homeowners have risen about 20% in the past two years and are expected to rise another 6% in 2024.
The climate crisis is causing insurance costs for homeowners to rise due to increased expectations of damage payouts from more frequent and intense weather events.
Accuracy
Homeownership is becoming less attainable due to high mortgage rates and insurance costs.
Some Americans are choosing to rent or move due to high homeownership costs, including Gen Zers and millennials who are optimistic about buying a home when inflation rates cool.
Deception
(80%)
The article provides factual information about the increase in mortgage rates and insurance costs, as well as the impact of the climate crisis on insurance prices. However, there are instances of emotional manipulation and sensationalism that lower the score. The author uses phrases like 'dire situation' and 'highly-disaster areas' to elicit an emotional response from readers. Additionally, some statements are selectively reported to support the author's position, such as mentioning specific insurance cost increases without providing context about overall trends.
Insurance is an inevitable monthly budget item: It is often required by mortgage lenders or state governments.
Homeowners are now spending between $500 and $5,500 a year on insurance, depending on where they live.
Fallacies
(85%)
The article contains an appeal to authority and inflammatory rhetoric. It also uses a dichotomous depiction of homeownership as unattainable due to high costs.
According to the insurance comparison shopping site Insurify, overall home insurance costs have risen about 20% in the past two years and have the potential to rise another 6% in 2024.
As the climate crisis escalates, it’s likely homeowners’ insurance will only become more expensive.
The property insurance industry lost nearly $26 billion in 2023, according to the most recent American Property Casualty Insurance Association data. To make up for losses, many companies are raising premiums.
Bias
(95%)
The author expresses a neutral stance towards the topic of rising homeownership costs and insurance prices. However, she does mention that some Americans are opting for rentals or moving due to these high costs. This could be perceived as implying that owning a home is becoming less desirable or unattainable for some people, which could be seen as a negative slant towards homeownership. Additionally, the author quotes Laura Longero predicting that insurance costs will continue to rise for residents in high-disaster areas, which could be perceived as biased towards those who live in such areas and may create a sense of fear or hopelessness among readers.
Are you a homeowner paying a lot for insurance? Have you chosen to rent or move because of homeownership costs?
Some Americans are choosing to rent or move due to high homeownership costs
Mortgage rates have increased to a five-month high of 7.4%.
Accuracy
Median home sale price has jumped 5% in the past year to $380,250.
The Fed raised its benchmark interest rate from virtually zero to more than 5%.
Deception
(30%)
The article makes several deceptive statements by using emotional manipulation and sensationalism. The author states that 'Mortgage holders are shelling out a record $2,800 on average to cover their monthly payments' and 'The median monthly mortgage payment has jumped 11% over the past year to hit $2,775 for the four weeks ended April 14'. These statements create a sense of urgency and exaggerate the situation. The author also states that 'People are probably borrowing more to afford increasingly pricey homes' and 'The painful rise in mortgage costs is just one headache for households', implying that this is a new problem when it has been ongoing for some time. Additionally, the article references predictions from Barbara Corcoran and Bill Pulte without disclosing that they are not experts in economics or housing markets.
People are probably borrowing more to afford increasingly pricey homes
Mortgage holders are shelling out a record $2,800 on average to cover their monthly payments.
Shark Tank investor Barbara Corcoran has declared that house prices will 'go through the roof'
The median monthly mortgage payment has jumped 11% over the past year to hit $2,775 for the four weeks ended April 14.
investor Bill Pulte recently suggested they could spike 20% to a record $500,000
Fallacies
(85%)
The author makes several appeals to authority and uses inflammatory rhetoric. He quotes experts making predictions about future housing prices and mortgage rates without providing any context or evidence to support their claims. This constitutes an appeal to authority fallacy as the author is presenting these statements as facts without providing any reasoning or evidence of his own.
Shark Tank investor Barbara Corcoran has declared that house prices will ‘go through the roof’ if rates drop by just a single percentage point,
investor Bill Pulte recently suggested they could spike 20% to a record $500,000 if the Fed cuts too soon.
Mortgage holders are paying an average of $2,800 per month for mortgage payments.
The median monthly mortgage payment has increased by 11% over the past year to $2,775.
Inflation spiked to a 40-year high of over 9% and was still running at 3.5% in March.
Accuracy
Median monthly mortgage payment has increased by 11% over the past year to $2,775.
Deception
(30%)
The author uses emotional manipulation by stating 'It's getting more expensive to own a home.' and 'People are probably borrowing more to afford increasingly pricey homes.' These statements create a sense of urgency and fear for those looking to buy a home. The author also engages in selective reporting by only mentioning the increase in mortgage payments without providing context about potential increases in income or other factors that may offset the cost. The article does not disclose any sources.
People are probably borrowing more to afford increasingly pricey homes.
It's getting more expensive to own a home.
Fallacies
(85%)
The article contains inflammatory rhetoric and appeals to authority. It also presents a dichotomous depiction of the housing market.
. . . Mortgage rates are at a five-month high after stubborn inflation dashed hopes for rate cuts soon.
The painful rise in mortgage costs is just one headache for households.
The Fed’s response to surging prices has been to hike its benchmark interest rate from virtually zero to more than 5%.
Homeowner's insurance premiums have increased by 5.8% under Trump and 11.8% under Biden.
Private auto insurance premiums have increased by 8% under Trump and 17.3% under Biden.
Maintenance and repair of dwellings has increased by 11.5% under Trump and 30.8% under Biden.
Motor vehicle maintenance and repairs have increased by 11.1% under Trump and 30.2% under Biden.
Accuracy
No Contradictions at Time
Of
Publication
Deception
(50%)
The article contains selective reporting and emotional manipulation. The author presents data showing an increase in various costs for homes and autos under both Trump and Biden administrations, but the focus is on the percentage point changes during Biden's tenure. This creates a biased perception that these increases occurred solely or primarily under Biden's watch, even though the data itself does not prove this. The author also uses emotional language to elicit sympathy from readers for homeowners facing rising costs and fear of financial instability.
Home insurance costs have risen 63% in two years for Darren Gondry and his wife, Lori.
Home maintenance fees have risen. It cost an average of $6,663 a year to maintain a home in the fourth quarter of 2023.
Nearly one in five homeowners couldn’t afford a $500 emergency repair without going into credit-card debt, according to a February online survey of 1,000 homeowners by tech company Clever Real Estate.
Fallacies
(85%)
The article contains several fallacies. It commits the false cause fallacy by attributing rising insurance and maintenance costs solely to Covid-19 stimulus measures and lockdowns. The author also engages in a straw man argument by claiming that neither Trump nor Biden handled Covid well but then proceeds to blame Biden more for the economic consequences of the pandemic. Additionally, there is an example of a false dilemma when the author suggests that people are angry due to inflation or deflation, ignoring other potential causes for economic discontent. Lastly, there is an appeal to ignorance when the author states that economists wonder why so many people are angry without providing any evidence to support this claim.
The Hidden Costs of Homeownership Are Skyrocketing
Both Trump nor Biden handled Covid well, but Biden was an outright disaster.
