A new study by the Alaska Housing Finance Corporation (AHFC) shows that home prices are set to rise above their peak in 2022 and 2023, and mortgage rates have risen by more than 50% over the past six years, making it increasingly difficult for residents to buy a home in Alaska.
The study, released June 19, found that the average principal and interest payments on homes purchased in Alaska will increase by 52% between 2018 and 2024. Newsweek reached out to AHFC by phone Wednesday morning for comment.
In addition to relatively high home prices, rising mortgage rates are likely another factor making housing unaffordable for many would-be buyers in the state.
A summer view of a large wooden frame home in Ketchikan, Alaska. A recent study found that between 2018 and 2024, Alaska mortgage interest rates will increase by more than 50%. A summer view of a large wooden frame home in Ketchikan, Alaska. A recent study found that between 2018 and 2024, Alaska mortgage interest rates will increase by more than 50%. Getty Images
According to the latest data from Redfin, the average sales price of a home in Alaska was $388,400 in May, up 2.2% from a year ago, and $363,000 in May 2022. Anchorage, the state's largest city, was the metro area with the fastest sales price growth in the state, up 3.8% from a year ago in May.
Despite a large increase in inventory over the past year, prices are still rising, with 2,230 homes for sale in Alaska in May, up 19.8 percent from a year ago. New listings were up 21.3 percent from a year ago. But the average supply is just two months, far short of the six months considered long enough for the market to turn in buyers' favor.
Things aren't any easier for renters in the state: Average rents have increased 24% since 2018 and are expected to hit an average of $1,325 statewide in 2024, up from $1,250 the previous year.
Rents increased in all seven communities analyzed by AHFC experts: Anchorage (+7.84 percent), Fairbanks-Northstar Borough (+4.17 percent), Juneau (+3.85 percent), Kenai Peninsula Borough (+4.71 percent), Ketchikan Gateway Borough (+8.41 percent), Kodiak (+20.83 percent) and Matanuska-Susitna Borough (+6.38 percent).
Danielle Delfino, director of planning and program development for AHFC, told Alaska News Source that Alaska's housing situation is complicated, with “a lot of things moving at the same time.”
“There's no longer a 'this is' or 'that' answer to some of the housing issues people are facing,” Delfino said. “Alaska is an expensive place to build. Most of our communities are expensive to build in, and inflation and land interest costs have made those issues more difficult, both before and after the pandemic.”
Are you an Alaska resident trying to get a mortgage or struggling to buy a home? Have you been affected by the recent increase in mortgage rates? Contact us at g.carbonaro@newsweek.com and tell us about your experience.
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